Timber Prices Defended

Press, Volume CIV, Issue 30879, 12 October 1965, Page 6

Timber Prices Defended

(From Our Own Reporter) HANMER SPRINGS, Oct. 11. Regret at the many published references to rises in the price of timber, and at suggestions that they were the main cause of increases in housing costs, was expressed today by the president of the New Zealand Timber Merchants’ Federation (Mr H. C. Smart) at the fiftieth annual conference of the federation. “It is interesting to note that since 1959 rises in timber prices have raised the price of a 1000 sq. ft. house, sheathed in weatherboards and of standard design, by only 4.5 per cent,” he said. Mr Smart indicated that any price increase had first to be approved by the Price Tribunal —an arrangement which would continue until the Government decided otherwise. A financial survey completed last May had resulted in small increases badly needed by federation members. The executive proposed to continue with an examination of cost and profit trends. “Earlier this year the esults of an economic survey of the timber merchandising industry, prepared by independent economic consultants, were released to all members,” Mr Smart said. “At first glance the document makes dismal reading, and unequivocally confirms the often expressed view that the retail profit margins on timber are inadequate. “This position was partially

remedied by various increases and adjustments in the then ruling retail prices as authorised by the Price Tribunal and the Trade Practices and Prices Division. Certain facts remain to be faced. The processing of timber is carried out, in some instances, a definite and substantial loss'in merchant yards. There Are many cases where departmentalised costs are not available, and losses (or potential losses) are not readily recognised by management. Our

consultants express the view that machinery is not being fully utilised, and that the appreciation of property values, particularly on the urban fringes, is such that the land on which the yard is sited becomes too valuable for use as a traditional yard." Mr Smart emphasised that diversification by timber merchants had now spread beyond the established lines into the wider area of allied fields, notably builders* supplies. These developments would require closer examination by orthodox merchants. One of the questions which the conference would be called upon to examine, having regard to modern trends, would be, “what constitutes a timber merchant today?”