New technology in the wood-processing industry is proving to be a double-edged sword.
The country's smallest sawmills have been closing for years, as the industry consolidates around the bigger players with the money to invest in more productive machines.
About 50 sawmills have closed in the past three years, the latest, an Upper Hutt mill, which on Wednesday announced it'll close by March.
The FIRST Union, which represents workers in the industry, estimates 1300 jobs have been lost in the past three years.
Companies say the volatile exchange rate, the high price of logs and the delay of a Christchurch rebuild have cost them millions.
Wood Processors Association chief executive Jon Tanner says the industry is currently rationalising, meaning less jobs but more efficient mills.
He says clearly some sawmills are doing much better than others and the closures may be related to the scale or cost of the operation or the use of new technology.
Mr Tanner says new technology is looking at improving the productivity of labour, which can mean upskilling workers to operate new hi-tech machinery and the outcome of that it sometimes the loss of jobs, but a greater efficiency to the mill.
He says at the some time as there are reports of mills going out of business, other mills are making new investment and expanding, so it's highly variable and depends on what market the mills are in, the scale of the operation the kinds of products they are producing.
Mr Tanner says wood processors need efficient machines for the Christchurch rebuild.
He says it will be a great opportunity to demonstrate that New Zealand has some unique technology and intellectual property around building multi-storey, commercial, wooden buildings that are seismically tolerant.
Meanwhile, the Government says it can't assure the wood-processing industry that only New Zealand-processed timber will be used in the Christchurch rebuild.
However, Minister of Forestry David Carter says he has encouraged the use of local products for the rebuild.
