NZ Govt Backs Wool Industry with New Procurement Rules for Buildings

Economic Growth Minister Nicola Willis, in announcing the change, emphasized the role of government spending in driving demand for wool and creating job opportunities.

The New Zealand government is stepping up its support for the wool industry and local sheep farmers by introducing new procurement rules aimed at driving the demand for wool products. Effective from 1 July 2025, government agencies will be required to prioritize woollen fibre products in the construction and refurbishment of government buildings, where feasible and appropriate.

The move, a key initiative under the coalition agreement between New Zealand First and the National Party, aligns with the Government’s broader efforts to support rural industries and stimulate economic growth. Economic Growth Minister Nicola Willis, in announcing the change, emphasized the role of government spending in driving demand for wool and creating job opportunities. "By leveraging government procurement, we can not only create more opportunities for wool producers but also foster innovation in the building materials industry," she said.

This new policy requires that woollen fibre products, such as carpets, insulation, upholstery, and acoustic panels, be used in government buildings that are being constructed or renovated. The directive applies to projects with a cost of $9 million or more and refurbishments above $100,000, impacting around 130 government agencies.

Minister Willis explained that the use of wool in construction materials offers numerous advantages beyond its economic benefits. Wool is a sustainable and healthy material, offering natural sound-dampening and pollution-absorbing properties. Additionally, wool contributes to healthier indoor environments by regulating humidity and improving air quality. These benefits, she noted, make wool an ideal choice for government buildings aiming for more environmentally friendly and healthier spaces.

Associate Agriculture Minister Mark Patterson further stressed the significance of the initiative. “This isn’t just about procurement – it’s about supporting our wool industry and farmers by increasing demand for wool in government buildings,” he said. Patterson also highlighted that the government’s decision would hopefully inspire private businesses to adopt similar practices, fostering a broader market shift toward natural materials.

The wool sector is integral to New Zealand's economy, contributing $549 million in the financial year ending 2024 from the export of wool products. Although the industry has faced challenges, including stiff competition from synthetic fibres and a decline in sheep numbers, the tide is beginning to turn. Wool prices are now covering shearing costs, and global consumer demand for sustainable and renewable fibres like wool is on the rise.

New Zealand remains the third-largest wool producer in the world, following China and Australia, accounting for about 9% of global wool production. The government’s new policy is expected to not only provide a boost to the domestic wool market but also create new investment opportunities for innovation in building materials, which could lead to the opening of new markets.

In addition to the wool procurement directive, the government is currently reviewing the broader Government Procurement Rules to eliminate red tape and encourage more responsible spending, greater competition, and better value from taxpayer investments.

By creating favorable conditions for businesses to thrive and prioritizing the use of natural materials, the New Zealand Government aims to further strengthen the wool sector, ensuring it continues to contribute to the nation's economy while also helping to build a more sustainable future.