Forestry contractors are closing their businesses or pulling out of the flood-hit Hawke’s Bay and Gisborne regions as pressures on the industry continue to mount. Forest Industry Contractors Association spokesperson Ross Davis says there are “huge concerns” for the viability of forestry contracting businesses, with some already in liquidation and others at risk of folding. A recent survey of FICA members found 21% of respondents did not have a current contract and 40% had only a one-year contract. Log prices are already low and expected to drop further next month, meaning a reduction of harvest targets and cancelled contracts and Ross Davis says many businesses will not survive. One such is Stubbs Contracting and owner Robert Stubbs says at one stage he employed 70 workers but now it is down to 22 and he’s decided to give up.
The forestry industry has contributed a huge amount of money into the Gisborne economy with workers getting between a thousand and two thousand dollars a week. Robert Stubbs says now he is in the process of selling his equipment.
More than half of those surveyed have seen production drop by 20% or more, while 16% are down more than 30%. The forestry sector is the third-largest contributor to New Zealand’s export earnings, alongside dairy and meat.