High consumer demand and supply delays are adding pressure.
Suppliers were under pressure from rising overseas and internal freight costs, PlaceMakers Dunedin and Mosgiel owner-operator Justin Macready said.
Suppliers had largely absorbed increasing freight costs but that could not last forever.
"I’ve been in the building industry for 30 years and this is the most dynamic sort of market that I’ve seen, so far as supply and demand," Mr Macready said.
"The challenges in the supply chain in general is crazy."
The Otago Daily Times understands freight costs have risen in some cases by 400%.
A major retail-trade supplier’s freight costs were understood to have tripled.
Another Dunedin manufacturing business was told by a supplier that the delivery cost of a 20-foot (6m) container had risen from $800 to $3450.
In the case of PlaceMakers Dunedin and Mosgiel, freight costs were indirect, because pricing for most goods was free in-store, Mr Macready said.
"We have seen increased freight costs which lead to increased prices, which are starting to creep up across the board," he said.
Supply uncertainty meant PlaceMakers was having to hold significantly more stock.
"We’ve got 40% more stock here than we had this time last year to try and cover it."
Suppliers were being asked to hold more stock for longer periods to guarantee supply, he said.
For example, forecasts for some suppliers had been extended as far as September.
"We don’t know where the delays are coming from sometimes, so we are trying to make an educated guess across the board."
Mr Macready expected significant price increases from a lot of suppliers, who had absorbed costs over the past few months.
"We haven’t seen a heap of price increases so far. We’ve seen a few, probably a few more than we normally would.
"But we expect that to be a real issue."
Supply and demand from increased building activity had driven prices up about 5% for domestic product, such as timber and plywood, before Christmas.
"The market did not expect the demand that there has been, especially building supplies."
However, the bigger issue was sourcing stock from overseas.
Two major suppliers of fibre cement board and paint previously manufactured in New Zealand had shifted offshore to Australia, he said.
Building material suppliers were also paying higher for logs than this time last year.
PlaceMakers is the retail trading arm of Fletcher Building.
A Dunedin builder, who did not wish to be named, said there was definitely a shortage of stock across the industry.
The cost of building materials from his suppliers was rising between 2% and 7% this month.
Bunnings New Zealand director Jacqui Coombes said the business was not seeing major stock constraints and had good availability of most products across its store network.
"We source products from thousands of different local and international suppliers and have options to source from alternative suppliers where necessary," Ms Coombes said.
The business carefully managed its input costs, including freight, she said.
Carters and ITM declined to comment. Mitre 10 did not respond to media inquiries.
