Over the past month, a number of themes have started to re-emerge across the timber and hardware supply chain, and we are already seeing the impacts in the field.

Cost pressure is returning.  Construction costs are again moving upward, with forecasts suggesting increases of up to 8–10% over the next 12 months, driven largely by fuel, freight and materials.

Fuel costs in particular have risen sharply in recent weeks — in many locations by around 30% — and that is flowing directly into harvesting, transport and distribution costs right across the timber supply chain.

This is an area we are continuing to raise in our advocacy work, particularly in the context of housing affordability and the cumulative impact of cost inputs on project viability.

At the same time, global events are once again exposing how fragile supply chains remain. Disruptions through the Middle East are already impacting shipping routes, adding both time and cost to imported materials. Freight rates on key routes have lifted materially in recent weeks, with flow-on impacts expected over the coming quarter.

We are monitoring these impacts closely and feeding real-time insights from members into government discussions, particularly where supply chain disruption risks further constraining housing delivery.

Closer to home, the structural issues in our industry are becoming clearer. Australia imported more than $3 billion worth of timber and wood products last year, with around 44% coming from China alone. That level of reliance leaves the sector exposed not only to price volatility, but also to increasing compliance requirements as international supply chains come under greater scrutiny.

In response, we are progressing work on traceability and supply chain transparency, including exploring practical, scalable solutions that will support members to meet emerging compliance requirements without adding unnecessary cost or complexity.

The demand side remains uneven, and this is where the state picture really matters. Queensland and Western Australia are holding up relatively well, supported by population growth and project pipelines. In contrast, New South Wales and Victoria are significantly weaker, with approvals and commencements still well below where they need to be to sustain the supply chain. For many members, particularly those exposed to detached housing, this is translating into patchy workloads and ongoing pressure on margins.

We are continuing to advocate strongly on planning reform, approval timeframes and the broader policy settings impacting housing supply, with a clear focus on ensuring the supply chain perspective is understood in those discussions.

Overlaying all of this is the accelerating push toward traceability and certification. Globally, around one-third of companies exposed to new deforestation regulations are still not fully compliant, highlighting both the scale of the challenge and the risk for Australian businesses operating in export-linked supply chains.

This remains a priority area for the Association, and we will continue to provide guidance, tools and support to help members navigate what is becoming an increasingly complex compliance environment.

Taken together, these developments point to a market that remains challenging and, in many respects, increasingly complex. Our focus remains on both fronts — advocating for the right policy settings to support the industry, and working alongside members to help them respond to the very real operational pressures they are facing.