As the New Zealand Herald reports, logging contractors in New Zealand are letting staff go or are working on reduced hours after the sudden fall in log prices earlier this year, and some are having trouble meeting their loan repayments on capital equipment. The newspaper has got this information by the New Zealand Forest Industry Contractors Association.

The association, which has 200 members who are responsible for about 75 per cent of the annual harvest, said the sudden fall had caught many unawares. Many forest owners have put their harvest on hold in the hope that prices will soon recover.

Chief executive Prue Younger said about 20% of the association's membership had made workers redundant, were working on reduced hours, or were struggling to make capital repayments on their equipment. About 3,000 people are employed by the association's members, which tend to be the bigger contractors.

The sector is used to market downturns, as there have been three over the last 20 years, but Younger said this one shows a more rapid drop than those before.

New Zealand log prices in China have improved a little after slumping earlier in the year on the back of reduced demand. "A" grade logs last traded at US$112 per JAS metre after last month hitting a low of US$105/metre.