The Australian Timber Shortage: What You Need to Know

[14/07/2021]



Australian Timber supplies are at a crisis point.
A perfect storm of limited supply and unprecedented demand has put significant pressure on sawmills, builders and families across the country. 

Interestingly Australian Timber production hasn’t met demand in more than 20 years - but this has never previously been a problem. 

So why are things different now?



Supply Constraints.

In the past, Australian timber imports were mostly unconstrained. Surges in demand for timber were easily met with greater import levels to meet demand. 

Until 2020, approximately 20% of all timber used in new home construction and renovation was imported.

Of course, the pandemic changed this.

International shipping was suddenly met with greater limitations - at times completely paralysing timber imports into the country. 

Simultaneously, Australian timber production was hampered by the ‘Black Summer’ Bushfires in 2019/2020. Domestic forestry reserves and timber plantations were devastated by the fires and have greatly contributed to a lowering of domestic supplies.



Unprecedented Demand

Australia’s current construction boom (driven on the back of the Federal Governments HomeBuilder grant, record low-interest rates as well as a number of other Australia wide stimulus initiatives) meant 20% more new homes will be built in 2021 than the previous new home construction record set in 2018. 

Modelling by the CFMEU suggests that to meet this demand 2.1 billion cubic metres of timber is required - but current national capacity only accounts for 1.8 billion cubic metres - a 15% shortfall.

The increase in timber demand isn’t limited to Australia either. 

Worldwide, a majority of developed (and some undeveloped) economies are experiencing a boom in detached homes and renovations - increasing global timber prices and demand while limiting supply.




The Road Out

The timber shortage will continue as long as import constraints persist. But theres a light at the end of the tunnel. 

The HIA has stated that “All indications are that international pressures are now easing and timber supply in Australia will improve significantly over the next 6 months.

In the meantime, initiatives are being explored to increase domestic timber production and reduce the deficit, including. 

  1. As increased timber milling capacity. 
  2. Transporting timber to unused mills. 
  3. Harvesting timber that has not reached maturity or is bushfire affected 

There will also likely be a movement away from timber for many aspects of home building where well-known alternatives exist.


The HIA has a range of resources to help its members in managing time delays and cost increases with customers that you can find here.



References 

Sources: HIA, Timber Shortage in 2021 - Published June 2021. 
ABC News, Timber supply can't keep up with demand as housing boom comes after Black Summer bushfires - Published 02/07/2021.

 

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