Hardware store chain Mitre 10 is raising prices on a range of construction products as cost pressures and domestic timber prices increase.
A regular communication sent to Mitre 10 trade managers to help them support customers sighted by Newshub provides a list of price increase notifications for 2021. It shows 79 Mitre 10 suppliers, including suppliers of timber, steel and cement, are raising prices from 2 percent to 22 percent over January to August.
In April, prices for Summit Steel products rose between 15 percent and 21 percent; prices for drymix concrete and cement products rose 6.9 percent; and decking, timber and plywood supplier Keyland Ply increased prices between 6 percent and 12 percent.
Among the timber suppliers on the list is MLC Group, a manufacturer of moulds and components. From May 1, prices increased between 6 percent and 11 percent. The list shows prices for Southern Pine, Stoneyhurst Timbers, Taranaki Pine, Nelson Pine and Rosvall Sawmill products will increase in June.
Mitre 10 general manager solutions Chris Peak told Newshub cost inflation is causing prices to rise across all categories, including timber.
"This last year has been challenging and we've seen cost pressures in freight, raw materials and labour costs," he explained.
Mitre 10 is working with trade partners to try to mitigate costs, but some price rises are unavoidable - and Peak says "in some circumstances, we have no choice but to pass them on".
A Ministry for Primary Industries (MPI) spokesperson confirmed domestic demand for logs and sawn timber remains strong.
Since October 2020, New Zealand's supply of logs has been relatively low. Increased demand for logs, mainly from China, is driving higher timber prices and wood processors around the country are struggling to keep up with demand.
"There's been an increase in price for most of the log processors for domestic sawn timber products in February," the spokesperson said.
Due to increased demand from the US and Australia, export prices for sawn timber are relatively high.
"Firstly, the volume of logs supplied to the mills are somewhat low, secondly, exporters are competing with domestic users for the available timber," the spokesperson added.
"This has put upward pressure on domestic timber prices."
ASB chief economist Nick Tuffley confirmed strong demand for raw log exports, an increase in construction activity and reduced capacity of processors is pushing up prices.
"There's a lot of demand but the supply capacity - particularly for sawn timber - has been impacted."
