The Cement and Concrete Association says Labour's plans to help the timber industry could harm other industries.
The policy includes tax breaks for companies that invest in wood processing and a push to have government buildings up to four-storeys high built with timber.
Labour leader David Cunliffe says the tax breaks could cost up to $40 million a year but could bring in up to $80 million in investment.
Mr Cunliffe unveiled his party's blueprint for the forestry sector at the Forest-Wood conference in Wellington on Wednesday.
He said Labour would introduce a range of tax measures to incentivise investment in forestry, encourage replanting and bring in a pro-wood policy that prioritised wood for domestic construction.
Association chief executive Rob Gaimster says building products should be chosen on factors such as strength, cost and sustainability.
He says the policy could have a huge impact on jobs in the construction sector not working with wood.
"Governments shouldn't be picking winners when it comes to the selection of construction materials, which should really stand or fall on their own technical, cost, aesthetic and sustainability credentials."