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trade focus
GARY WOODHOUSE (LANDMARK HOMES): “These supply challenges aren’t going to be there forever. That’s why I think
from the merchant’s point of view, they need to think long term and not just try to grab what they can today. People in this business have long memories...”
Indeed, he says, Signature’s first home business has dropped by 15%, although this has been countered by a lift at the mid and upper end.
“Demand has shifted into a more desirable sort of product,” he says, “To people who are on second, third, fourth homes, who are less susceptible to banking issues.”
The Combined Building Supplies Co-operative (CBS Co-op) will also be pleased with the growth it has seen recently, with 830-odd shareholders on its books, ranging from small builders, to farmers, subbies and other purchasers of building materials in total now representing some $30 million in spend.
Calling this “a decent account for a small co-operative,” co-founder Carl Taylor reports: “All our members are pretty busy,” before qualifying with: “But a lot of them are sort of thinking ‘what’s it going to look like in 12 months’ time?’”
Over at top group home builder GJ Gardner, MD Grant Porteous says the franchise business has had “a phenomenal 25th year”, having set a new record for homes completed, despite Covid and supply chain issues, and that it is looking at “extremely strong” sales going forward.
“In such challenging times and difficult times, it’s great to have so many customers happy with us,” he says.
As with others, the size of GJ Gardner’s homes continues to decrease alongside smaller sites, but if current pressures remain as is, says Grant, it looks like GJ’s average contract price could increase by six figures by the end of this year.
“We’re taking the average contract price from let’s say the 460s to the 560s across our business. And I hate to say that most of it comes with no consumer benefit!
“So, yes, it’s been challenging, but it’s great to have your order books fuller than you need and that you can be selective on who you build for...”
SUPPLY CHAIN ISSUES ONGOING
Product supply issues are ongoing, especially core products and materials, from frame & truss, to plasterboard, insulation and cladding.
When the BCITO’s Frame & Truss National Advisory Group met
in May, key discussion points included jobs being delivered only half done with the balance arriving no less than four to six weeks later.
As a result, “Jobs are not only being postponed, they are being postponed indefinitely,” said BCITO in its May frame & truss update.
No coincidence then that both a range of regional and national players have been working on addressing how to provide steel framing as an alternative.
Also in BCITO’s May update: “Due to the wallboard shortage, start dates are being delayed to the extent that August 2022 jobs are now being scheduled for the first quarter of 2023.”
Just as well then that forward ordering has been key to GJ Gardner’s last two years.
Grant Porteous evxplains: “On the back of Covid in 2020, very early on, we gave our quantities and forward orders by month for every business 12 months in advance to our suppliers.”
Despite good systems, good forward ordering, planning and rescheduling, some GJ Gardner sites were held up but, says Grant: “We really haven’t had a significant amount of delay caused by product, certainly less than many other builders.”
At the same time back in 2020, GJ Gardner undertook a supplier review to “provide more value to less suppliers and hopefully get that value returned.”
That review included a change of merchant: “Carters have been a breath of fresh air in that they have worked really, really hard to win our business,” says Grant Porteous.
Our other group home builder Signature Homes saw its average productivity drop by 25 working days since last year, although Paul Bull says it is hard to measure whether that’s about supply chain delays, and/or the complexity of the houses Signature is building now, and/or builders getting sick, or a combination of all of the above.
Interesting to note however that Signature Homes is “still very much committed to offering fixed prices on homes.”
“We work closely from a procurement, supply chain perspective with our national suppliers. So we get visibility on what prices are going to look like in, you know, three, six, nine months, which gives us the ability to forward-price.
“Ultimately the consumer pays,” says Paul Bull, adding that
PAUL BULL
(SIGNATURE HOMES): “Most suppliers, the merchant network and the supply chain favour the
volume builder or the large clients. The sad thing for the industry is that demand has got to a point where they’ve actually got to make a choice...”
16 NZHJ | JUNE 2022
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