SINCE late last year, builders have been flagging framing pine shortages and warning customers jobs may take longer and may cost more, especially for longer lengths.
Three key problems have converged to create this shortage. The first is simply that we haven’t enough trees to harvest. Huge bushfires throughout the years of the Millennium Drought – and the drought itself – damaged or destroyed valuable plantations, sending prices sky high and limiting availability.
Ill-fated investor schemes that used timber plantations as vehicles for tax breaks collapsed in the years around the GFC, damaging investor confidence at the same time as less public land was released for forestry, creating a chronic under-supply of pine in particular.
Responses to this issue are in the pipeline, such as the federal government’s $20 million forest industries injection in this year’s budget, the Victorian Government’s $110 million commitment for plantations in the Latrobe Valley and the Next Generation Forest Plantation Investment research project at the University of Melbourne, funded by forest industry partners and the Australian Government through Forest and Wood Products Australia.
But trees take time to grow.
The second problem is the USA. It was at the vanguard of the influx of comparatively cheap sawnwood and other building timbers from international suppliers during the GFC and immediately after (at a time when new builds were virtually at a standstill in much of the US and UK, and slowed in Canada and Europe, but remaining buoyant in Australia).
Over the last few years, the US construction industry (particularly housing) has recovered well and timber use has been growing at close to 5% per annum.
Product that was previously offered to the Australian and Chinese markets, among others, is now used at home, and what is available for import to Australia has risen in price.
The final problem is in our sawmill supply. While there were job losses in mills over the last decade – depending on who you talk to, these were caused by either an inability of some mills to keep up with their more efficient competition or by American and European imports distorting local prices – the sawmills currently operating are generally highly efficient and primed for growth. But having toughed it out through the difficult conditions caused by the GFC, many are not able to secure the log supplies they need to grow – often because those logs are being exported to China.
The Chinese economy may have come off the boil a little of late, but it is still hot. Chinese residential and non-residential construction completions are estimated at nearly 1.2 billion square metres this year, up from 585 million in 2008.
It has prompted some in the industry to call for a ban on the sale of construction timber to China until the balance is redressed at home.
Meanwhile some builders are opting for steel frames and trusses in their housing construction – its dearer but at least you can get on with it.