Forestry contractors say they're at breaking point as pressure mounts on industry

New Zealand's forestry contractors say they're at breaking point.

A combination of inflation, continuous bad weather, and falling log prices has caused a reduction in harvests, leaving contractors short of work and wondering how to fill the gap.

Shaun Chisnall's Timberline Contracting business spans tree removal, chipping and land clearing.

That diversity has helped protect him from the pressures mounting on forestry contractors and made him popular with out-of-work forestry contractors.

"Typically the pool that we would get guys apply from is the arboriculture industry. This time we're getting a huge amount of applicants from the forestry industry - guys that are ringing us telling us they've lost jobs," he said.

A downturn in demand from China has in part caused log prices to fall, making harvesting trees uneconomical. Combined with increased operational costs and continuous bad weather, work for many forestry contractors is drying up.

"We're diverse enough that it's not affecting us as much as some but weather and definitely log prices are playing havoc for the dedicated loggers. I feel pretty sorry for them at the moment," Chisnall said.

The Forest Industry Contractors Association said its members are at "breaking point" and that two larger forestry contractors in cyclone-ravaged Gisborne have shut up shop.

A recent survey of forestry contractors found more than half had seen production fall by 20 percent or more. It also found 20 percent do not have a current contract while 40 percent only have a contract for one year.

"It's very easy to turn a contract off by a forest principal/forestry management company, whatever, but understanding that they're turning off seven people down the supply chain on the contractors end," Forest Industry Contractors Association CEO Prue Younger said.

"Those seven people have to go home that night and tell their families they've got to cut the budget on food because they might be working two or three days a week. You can't keep that up."

There's a lot to lose because forestry is the third biggest contributor to our export earnings.

"I'm regularly engaging with the sector to make sure we look towards what long-term security in this sector looks like," Forestry Minister Peeni Henare said.

The minister says it includes diversifying the industry.

An approach that's kept Chisnall in business and his phone ringing hot.