Page 20 - HW June NEW 2022

trade focus
CARL TAYLOR
(CBS CO-OPERATIVE): “We’re in the position that we’re in, not because of Winstone Wallboards, but
because as an industry we’ve done this to ourselves. As an industry we didn’t support the two other players that were here to support us, and that’s why they’ve left New Zealand, plain and simple...”
Signature Homes aims to be as transparent as possible around costs to give customers certainty, which the banks appreciate.
However there are concerns about project viability for builders who have entered into fixed price contracts, from New Zealand Certified Builders (NZCB) among others.
Members may be “exceedingly busy” with existing contracts, according to new NZCB CEO Malcolm Fleming, but supply chain issues are “front and centre” here too, with the ongoing labour shortage and “relentless” inflationary pressures.
Indeed, early this month, Quotable Value New Zealand has put the average increase in the cost of building a home in New Zealand’s main centres as 20.9% in the last 12 months.
To counter this, NZCB takes a firm view when it comes to fixed price contracts: “Going forward, we are advising our members that they need to have clear cost escalation clauses which allow cost plus contracts,” says Malcolm Fleming
Asked about how the supply chain is treating small builders, CBS Co-op’s Carl Taylor takes a typically alternative view when he says: “People ask me ‘why are we in this position that we’re in?’
“We’re in the position that we’re in, not because of Winstone Wallboards, but because as an industry we’ve done this to ourselves.
“As an industry we didn’t support the two other players that were here to support us, and that’s why they’ve left New Zealand, plain and simple.”
Related to the above comments, CBS Cooperative is not alone in being frustrated with BCAs “insisting on specifying one product to the exclusion of others.”
Seeking a positive out of all this, Carl Taylor asks “What other products can we use? Why don’t we build differently?
“In our business we’re looking at changing from timber framing to steel, purely so we can get it within two weeks, as opposed to six months.”
No surprise that Landmark Homes’ Gary Woodhouse also acknowledges: “Supply is a challenge for every builder, whether you’re building one home a year or 500.
“The market that we’re trying to manage our way through is the most challenging it’s been from a cost increase perspective,
probably for decades.
“Most people have never seen this level of price increases, and it’s
not just how many times timber went up last year, it’s the quantum – it hasn’t gone up 2-3% three times a year, it’s gone up more than 5%, three times a year.
“On top of this, the ability for the customer to go back to the bank for more money to complete a house has changed significantly to what it was six months ago.
“So there is pressure from the borrowing institutions, from the merchants and their ability to supply and for builders to manage cost increases.”
There’s that “perfect storm” again.
BUILDERS ON MERCHANTS: “TALK TO US”
All of our builders aim to walk the walk when it comes to transparency and communication with their customers, but some expressed concern that this was not the case with their merchant partners.
One builder I talked to pulled no punches when he said: “I’d
be surprised if any of the merchants were happy with the level of service they are able to provide at the moment, particularly around stock supply.”
Another wanted merchants to approach today’s supply situation bytreating“allcustomerslargeandsmallequallyandfairly”,rather than working to an allocation system favouring the biggest clients.
Towards the top of this heap, Signature Homes’ Paul Bull is clear that “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.”
Loyalty is another key factor in who does or should get supplies, says Paul Bull: “We have been very loyal to our supplier base over a long period of time, especially in the eight years I’ve been here.”
For his part, Carl Taylor asks candidly if many smaller builders are actually organised enough with forward ordering and the like to take advantage of a more democratic outlook if it existed?
“There’s a lot of anxiousness around material supply and being let down,” admits Gary Woodhouse at Landmark Homes, adding “I think the merchants are doing the best they can.
“The key thing that we look for is communication – really honest communication – around stock availability.
GRANT PORTEOUS
(GJ GARDNER):
“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!”
18 NZHJ | JUNE 2022
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