Jobs are in limbo for forestry workers. Photo / File
Jobs are in limbo for forestry workers. Photo / File
Just as they were finding their feet again after a downturn last year, forest workers are again questioning their future as they await news about whether trade in China will resume on Monday.
Forestry jobs are hanging by a thread as the impact of the coronavirus hits an industry inrecovery from a downturn.
China sawmills close two weeks before the Chinese New Year, and typically open again two weeks after, but self-isolation orders affecting workers has put a question mark on when they will open again.
This has directly affected the Rotorua and Bay of Plenty forestry industry.
According to New Zealand Forest Owners Association CEO Prue Younger, some contractors and employees of woodlots - parcels of productive woodland - had already been asked to down their tools as there was no work for them.
Some Rotorua forestry companies have also reported a slow-down.
Young said a survey was sent to forestry companies on Monday and Rotorua responses showed work had either slowed or it was business as usual.
Crews at some forestry companies were given yesterday off to give them a long weekend.
"The majority would be back at work on Monday but it will be on slow-down; slower production, possibly four days a week type of production," she said.
China is expected to announce on Monday whether it will re-open for business.
Whether there will be further job losses will depend on that decision and whether the trading environment in China remained closed.
"We were just getting right again after last August with the downturn in the industry," Young said.
DANA Ltd director Dennis Nielsen said it wasn't looking good for the forestry industry. Photo / File
"It's just after Christmas, they've all had two weeks' holiday ... lots of contractors and employees out there will be strung out," she said.
Dennis Neilson, director of forestry consulting company DANA Ltd, said he was in frequent communication with international partners, including in Shanghai, and it was not looking good.
"There is no hard, firm information on when the sawmills are going to start up, how quickly they might start, or how quickly they might get back to normal," he said.
Neilson said while there had been no official information about when trading would open again, there had been signals.
Schools in China were originally set to reopen in mid-February but, this week, that deadline was extended to early March.
"That doesn't say anything about sawmills ... but we think it's not a good sign," he said.
Another issue was around the trading and work within China and self-isolation periods, which Neilson said which would affect factory workers.
"It's hard to put a positive spin on it," he said.
Ports were "full of logs," which had to be unloaded, Neilson said but the quality of the logs would begin to deteriorate within weeks.
New Zealand Forest Owners Association president Peter Weir said China was "by far the largest and most important market for New Zealand's export logs".
The coronavirus was not the reason for the industry being hit, but it was the last straw.
He said the industry carried contractors through a downturn mid-last year.
Port of Tauranga chief executive Mark Cairns. Photo / File
"But our balance sheets aren't as strong now as they were then. We've had subdued prices since we came out of that recovery," Weir said.
"This is so much more uncertain," he said of the virus, compared to last year's downturn.
"Coronavirus is the last straw, it's not the root cause. The root cause is a massive amount of insect-damaged wood coming out of Germany and other places in Europe which have flooded the China market."
He said the industry was unsure about when sawmills in China would re-open, which was already a concern before the virus.
Port of Tauranga chief executive Mark Cairns said earlier this week the virus scare would hit the port's export volumes "no question", but the fallout would be short-term.
The international hub port is New Zealand's largest export port and its share price is already feeling the bite of investor jitters over the China-origin virus, closing on January 31 at $7.58 after an $8 high in early January.
Log exports were last year already reflecting a sharp decrease in international prices and demand. The port company in late October reported a drop of 5.2 per cent in log export volumes to just over 1.7 million tonnes in the first quarter of the 2020 financial year.
