An Open Letter to the Market from the Independent Hardware Group

Our industry finds itself in unique circumstances.

Grappling with soaring interest in house and renovation projects, the sudden growth in global demand for materials has caused a sizable shift in market dynamics, major supply constraints and driven prices up for most timber and building products.

There’s no denying that any delay in the building cycle places extreme pressure on the livelihood of many businesses, but patience, flexibility and transparent conversations can play a huge role in how quickly we all recover from this situation.

Independent Hardware Group is focused on supporting its members and its builders with clear and consistent communication and has drafted an open letter to the market on how we can work together to keep our builds moving.

Dear Builders,

Australia’s housing and renovation boom over the last 12 months has been well documented, driven by government stimulus to support our industry and shore up the economy. It’s a similar growth pattern globally and unfortunately, no market was sufficiently prepared for increases as dramatic or sudden as we’ve seen.

It means our entire industry finds itself in a unique set of circumstances:

1. Extreme and unprecedented demand for timber and related building products
2. An imbalance in the usual steady production cycle resulting in a global tightening of supply
3. Product shortages and soaring transport costs has seen increased supplier price movements, with 6 – 15% now added to the cost of most timber lines. Further price rises are expected over coming months.

These circumstances have resulted in us not being able to source and supply many products that you would ordinarily expect us to have in stock. The product groups most impacted are pine framing and LVLs – the two most voluminous products in the framing part of the house build.

To give you some context, imported structural timber usually sit at around 20% of Australian timber purchases. This has dropped to below 10% in recent months adding further strain to an already over-stretched local softwood industry. Australia is essentially competing with other countries for import timber and in many cases being thwarted by regions (particularly USA) prepared to pay significant premiums. Imports are being further impacted by shipping delays and port congestions.

Unfortunately we anticipate this situation will continue until at least the end of the calendar year. So, we ask our customers to work with us:

• Be flexible and open to using different lengths and different products that may be offered. Where we are unable to supply exactly what you request we may be able to offer alternatives to keep building
• Work with us on longer lead times. Order as far ahead as possible to help us secure your timber needs.
• Be aware of the price rises that are coming through and factor these into your future quotes
• Be respectful of your store contacts. They are all doing their best under difficult circumstances. The timber shortage is a global issue that all players in the supply chain are all caught up in.

Your local timber merchants are small independent businesses just like you. We understand the impacts to livelihood caused by any delay in the building cycle and are committed to dealing with all loyal customers big and small to mitigate the impacts as best we can, communicate facts in an honest and transparent manner and work closely with our suppliers to source product at a fair price.

Thank you for your ongoing support and understanding.