October has delivered some welcome improvement for the forestry sector. Export log prices lifted during the month, supported by a weaker New Zealand dollar, improving Chinese manufacturing activity, and healthy log demand through Chinese ports.
For contractors, the key message is that harvest activity remains strong, with national harvest volumes running ahead of last year. This should help support work programmes as we move into the summer season.
However, profitability remains under pressure. Fuel prices have increased in recent weeks and freight costs remain elevated. While forest owners are receiving better returns for export logs, contractors continue to face rising operating, labour and compliance costs.
On the domestic front, construction activity has improved, helping maintain demand from New Zealand processors and providing greater market stability.
What Contractors Should Watch
✅ Improved export log prices
✅ Strong harvest volumes and summer work programmes
✅ Steady domestic timber demand
⚠ Rising diesel costs
⚠ Ongoing freight cost pressure
⚠ Uncertainty around Chinese construction demand over coming months
FICA View
October's market conditions are the most encouraging seen for several months. Higher log prices should help underpin harvesting activity through summer, but contractors will be looking for those gains to translate into sustainable contract rates as operating costs continue to climb.
Overall, the market is more positive than it was during winter, but tight cost control remains critical for contractor profitability.
