Minister asks for patience over shortage of building supplies

Thursday, 3 June 2021

Timber prices have soared worldwide since the start of the Covid pandemic.

Construction companies are hoarding building supplies, compounding supply shortages caused by Covid, Building and Construction Minister Poto Williams has told MPs.

But Williams said it made sense for the Government to wait a little longer for more detailed information from the industry about the exact nature of the problems before deciding whether and how to intervene.

New Zealand Certified Builders Association chairman Mike Craig warned in April of what he called “the toilet paper effect” – a reference to panic buying in the Covid lockdowns – saying companies were stockpiling timber in warehouses in anticipation of continued supply problems.

Williams told Parliament’s transport and infrastructure select committee that she believed that behaviour was taking place and “would think about what levers the Government can pull”.

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Carpentry students are learning their trade while helping out the community, building houses and cabins for Habitat for Humanity.

“When things start to rattle the population, we do stockpile,” she said.

National Party MP Mark Mitchell said inflationary pressures in the building industry were “a massive threat”.

“Containers that 18 months ago were $500 are now at $5500. It is impossible to avoid that being passed on to the consumer and for the price of housing to go up,” he said.

The Ministry of Business, Innovation and Employment (MBIE) has suggested building companies could club together to place larger orders with overseas suppliers to raise their place in the pecking order when securing supplies, and possibly piggyback on orders for Queensland.

Williams said there were “regulatory levers” the Government might pull.

But she said the Government might wait “a couple of months” for more information that was coming its way through the Construction Sector Accord, which is a partnership between MBIE and the industry, before deciding on its next steps.

At the moment, it did not have a real handle on the detail of what was occurring, she said.

“We have had some news reports where some of our suppliers are saying they can no longer supply because of pressures upon them.

“But at same time we are hearing organisations like Carter Holt Harvey saying they are increasing production by 35 per cent,” she said.

Work being carried out through the Construction Sector Accord includes a survey that has gone out to several thousand businesses in the industry, asking what products they are finding in short supply, and the impact on prices.