Builders stockpile timber amid shortage

New Zealand’s structural timber shortage has been looming for months and some builders have been stockpiling timber in warehouses to ensure they have enough supply, a builders’ association says.

New Zealand Certified Builders Association chairman Mike Craig said the shortage had resulted in what he called ‘‘the toilet paper effect’’, a reference to toilet paper stockpiling witnessed during times of panic buying in the Covid-19 pandemic.

‘‘Businesses have been stockpiling timber in warehouses,’’ Craig said. That made it difficult to know how much stock was in the market and how severe the timber shortage was.

Since around November the practice had been reasonably widespread among builders who had enough capital to do it, he said. ‘‘If you’ve got capital, and you can spend you’re going to do it because it keeps your business going.

‘‘You’ve got to call it good business sense at the end of the day because you’re trying to protect your business and your customers.’’

His comments come after Carter Holt Harvey stopped supplying structural timber to Mitre 10 and ITM.

Its decision to keep supplying large customers including Fletcher Building-owned PlaceMakers and its own subsidiary, Carters, has drawn the attention of the Commerce Commission.

Craig said Carters alone would make up more than half of the timber product market and mostly catered to large building firms. Smaller companies tended to buy from Bunnings, Mitre 10 and ITM, he said.

‘‘Builders have got accounts to most of the suppliers around their area, but they have loyalties. You pick a business that looks after your demand.’’

Smaller operators were now more likely to go to Carters or Placemakers if they couldn’t purchase product from their regular supplier, he said.

The timber shortage had been apparent throughout the pandemic and builders were now having to plan jobs well in advance.

Craig’s business Mike Craig Builders was fully booked well into next year, he said. ‘‘Most builders just drive into the store and pick up what they want, now you’ve got to think ahead.’’

In normal times builders would plan four weeks ahead for a delivery. ‘‘That might be 14 weeks now plus.’’

Ockham Construction manager Will Deihl said the supply shortage had not come as a surprise. It meant Ockham would need to be more organised and pre-order timber months in advance from its suppliers, Carters and Placemakers.

‘‘We will be pre-ordering as early as possible,’’ Deihl said. ‘‘We talk regularly with our suppliers to make sure that we’re not going to end up hamstringing ourselves.’’

He said it might mean it would need to have more storage on site for timber products.

‘‘We like to keep as little on site as possible, obviously, because we don’t have a lot of space.

‘‘I don’t think we’d choose an offsite storage facility purely because of the cost side of things.’’

Registered Master Builders chief executive David Kelly said building supply shortages had been an issue for some time, with Covid-19 having an impact on global supply lines. ‘‘They are now escalating further, and the Carter Holt Harvey announcement is one part of that.

‘‘Our members are saying it is not just timber that is hard to get, but a variety of products, from taps through to glue.’’

Larger builders typically had arrangements in place and supply agreements, so were likely to be less impacted than a standalone builder, he said.

‘‘You’ve got to call it good business sense at the end of the day.’’ Mike Craig New Zealand Certified Builders Association chairman