The Timber Industry Federation says 2010 was one of the hardest years the sector has gone through.
It says about 13,000 house consents were issued, compared with the average 24,000.
Big export markets have been lacklustre and the high New Zealand dollar has also hurt the industry. Some 140 jobs have recently gone from sawmills in the North Island.
Deputy director Kevin Hing says the federation is also worried about what impact the emissions trading scheme will have on the future supply of logs.
He also warns that log-sellers relying overly on the Chinese market could affect the quality of logs available to New Zealand, because China wants wood for furniture and not housing.
