With the demand for timber being lacklustre both here and abroad, the New Zealand timber industry is in the eye of what it is calling the perfect storm.

New housing starts in New Zealand are at half their usual level and demand from our traditional markets like Australia and the United States is plummeting.

Timber Industry Federation Chief Executive, Brent Coffey, says these are tough times for the sector.

"Recently Asia has been performing quite well for us, it’s been the one shining light and unfortunately we’re seeing reductions there as well."

Also taking its toll on the industry is the delayed start to the much anticipated Christchurch rebuild and Mr Coffey says New Zealand’s political parties are now encouraging people not to invest in housing.

"Housing and property speculation became the bogeyman when everything was quite rosy and it has always been the soundest and best returning investment for New Zealanders.

"And we’ve just seeing these governments fiddling round the periphery.  I mean, Labour’s Capital Gains Tax is a direct attack on property investment and National’s the same thing, they’re trying to divert savings and investment into other areas and this is to the detriment of the housing sector."

The Timber industry says all of New Zealand’s major international markets are going backwards and instead of the huge amount of wood available being processed here and creating jobs, it’s shipped off to China and other Asian destinations.