The Forestry Industry Contractors Association says reports of a large forestry contractor going out of business highlight the fragile state of the industry.
The association's chief executive, John Stulen, said the harvesting and logging contracter, Harvestpro, had had equipment possessed by finance companies.
Its 200 employees in Northland and Gisborne face losing their jobs because operations are unable to continue.
The company has not responded to Radio New Zealand's calls or emails, but a Harvestpro employee has been in touch with union officials.
Mr Stulen said the news was sending shock waves through rural communities.
"Most people in the industry are aware there's been major repossesions of capital plant by the companies who finance that plant and with those repossesions taking place the company won't be able to operate and maintain their forest operations."
He said that it highlighted wider issues the industry is facing, including low export prices, a slowdown in demand from China, and higher capital costs that have come with mechanised harvesting.
"The company isn't speaking publically, all that's known is that there's men in Northland and Gisborne in their forest operations who are probably going to be without jobs very shortly."