South-west businesses struggling to keep up with demand for building supplies

Pontings Mitre 10 Warrnambool director John Ponting said the business was receiving allocations of certain products, including steel and timber, based on sales in previous years.

Timber is in short supply, Mr Ponting said.

"We could definitely do with some more," he said.

Mr Ponting said the business was working closely with builders in the south-west.

"We're spreading it as best as we can."

"The builders have been fantastic," he said.

"There's shortages across the board because of the building boom."

Mr Ponting said there was a 28 per cent price rise for steel predicted in January.

If the increase goes through, the year on year price will be 50 per cent higher.

"The price of certain lines of timber would have doubled in the past 12 months," he said.

The Housing Industry Association's chief economist expecting the squeeze on Australia's construction industry to last well into next year.

Tim Reardon has told AAP a shortage of labour and materials has pushed costs higher, while the time to complete a stand-alone dwelling has blown out from six to nine months to about a year. "It will be well into 2022 before the industry starts to return to more normal conditions," he said.

Timber, steel, PVC pipes, fittings, electrical equipment and tiles are all in short supply thanks to factors including global shortage of shipping containers, and domestic production of structural timber nearing capacity.

A record 146,000 new detached Australian homes were set to be built in 2021, a 20 per cent increase on previous figures, Mr Reardon said.

The surge in demand has been spurred on by the federal government's HomeBuilder scheme, which gave applicants up to 18 months after the signing of contracts to begin construction.

Australian Australian Forest Products Association chief executive officer Ross Hampton said a timber shortage was having an impact on a range of industries.

"In the lead up to Christmas, Australia's consumer goods supply chain is reporting a shortage of timber pallets to move goods," Mr Hampton said.

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