Smaller Christchurch building companies struggling

Keith Carney has been a builder in Christchurch for 12 years.

He said a few years ago he was booked out up to about a year in advance with five or six jobs on the go but lately he was having to take whatever he could get – even taking jobs he knew he would not make any money on.

“It’s not how good you are any more, it’s all who you know and if you’re the cheapest.

“There’s always jobs where you don’t make anything, you’re just working for a wage.”

He manages five other builders and hopes he will not have to let them go.

“We’ll see how it plays out in the next six months.”

Meanwhile New Zealand is crying out for builders and other labourers – the government in 2017 forecast demand for carpenters, joiners, building labourers and project builders would be up 10 percent by 2022 with just over 50,000 more workers needed in the construction sector.

However, in Christchurch predictions are the polar opposite. Demand for project builders and carpenters is down 14 percent and a need for building labourers is down 7 percent.

Certified Builders chief executive Grant Florence said it was partly a sign of the earthquake rebuild work coming to an end.

“The whole market there I think is just re-balancing itself and it’s still pretty volatile.”

He said consents coming through for new builds were down substantially compared to the rest of the country.

“In November, the building consents for housing went up 5 percent across the country but in Canterbury went down 9 percent, so that’s a 14-15 percent shift from the national average.”

Carl Taylor is the chair of Combined Building Supplies Co-operative – a Christchurch-based company which builders can join and receive bulk discounts on materials.

He said a lot of new companies cropped up during the rebuild.

“Now the problem you’ve got is a lot of the work is now complete and you’ve got a surplus of builders sitting there, and what’s happening is that a lot of the guys are cutting their margin to win work.”

He said larger building companies were still holding their own but sole traders and smaller companies were starting to struggle.

“A lot of them, they can’t move on their materials so the first thing they do is cut their margin and their labour rate. I’m aware of builders who are charging out $35 an hour – it’s absolutely obscene.”

He said the standard rate in Christchurch was typically $55.

Mr Taylor said KiwiBuild may help but with only 1000 homes planned for Christchurch many smaller players would not even throw their hat in the ring, wary of being undercut by the big companies.