Embracing light steel frame as alternative to timber

Uncertainty around timber supply for residential construction shows how the fortunes and future of New Zealand’s construction and manufacturing sectors are inextricably linked.

Our residential construction supply chains are not resilient, with an over reliance on one material. Firstly, there are credible and cost-effective alternatives to timber. Light steel frame construction has been available in New Zealand for over 30 years as a viable alternative to light timber frame construction in one to two story housing.

Light steel frame follows similar design and engineering pathways to light timber frame – leading home builder, Golden Homes has been building with it for over a decade.  The National Association of Steel Framed Housing (NASH) provides technical standards for one to two storied residential construction which are referenced by MBIE as Acceptable Solutions to the NZ Building Code.  Other alternatives to light timber frame include concrete and more recently SIPS – structurally insulated panels.

Secondly, if government is serious about addressing the housing and infrastructure deficits, then New Zealand needs to develop resilient supply chains to meet current and future needs.

Post COVID the disruption to overseas supply continues along with international shipping delays, (and significant freight cost increases) and inordinate delays at the Auckland port.  If we are to have a productive and profitable construction sector, then we need not only to utilise a range of material solutions, but government needs to urgently move to develop manufacturing policy which supports local construction. Key policy ingredients include investment, trade and the role of government procurement to provide certainty for continued investment in local manufacturing.

The reality is that the shortage of timber in New Zealand is not just a symptom of COVID but  is underpinned by record log exports from New Zealand to China.  China is in effect setting the price for New Zealand logs which undermines the profitability of local manufacturers and processors.  Government needs to move quickly to adopt trade policies which ensure product is available for local construction. Australia, British Columbia and South American pine growing nations all limit exports of logs – in British Columbia’s case there is a requirement to satisfy local demand before exporting.

Government needs to look closely at investment settings for local manufacturers, especially accelerated depreciation.  To compete internationally New Zealand businesses, need to invest in state-of-the-art manufacturing technology. A failure to act upon investment settings for manufacturing will continue to see local manufacturing close as international players move value added production to countries which offer more favourable, more secure investment incentives.

Without targeted investment policy for manufacturing, New Zealand will continue to be a commodity exporter – of logs.  But how long is it before we see imported timber coming into New Zealand to meet construction demand?

Ultimately, two things need to happen. The sector needs to transition to other material solutions and steel is a viable alternative as design and construction codes are similar and raw material is readily available from local steel manufacturing.   And government needs to act quickly on trade, investment and procurement decisions, or will see further disruptions to construction supply, further loss of manufacturing capacity along with the small to medium sized building businesses which rely upon them.