Tommy Honey: Construction Industry Council Executive Director on the survey showing builders believe the slowdown will continue another year

It's a waiting game for the construction sector as the economic downturn continues to bite. 

The latest EBOSS Builder Sentiment Report shows 67% of builders are seeing less demand for their services. 

70% feel industry conditions will continue to decline in the next 12 months. 

Construction Industry Council Executive Director Tommy Honey told Ryan Bridge everyone is waiting for economic conditions to pick up again. 

He says people are holding off selling their homes, which has resulted in fewer people renovating or building new homes. 

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Episode Transcript

Speaker 1 (00:00):
Almost three quarters of builders believe the construction slowdown will
carry on for at least another year. According to a
new EBOSS survey of six hundred and fifty Kiwi builders,
sixty seven percent don't have as much work as they
did last year, No surprises there, while seventy percent think
that industry conditions will decline over the next twelve months.
Executive director of their Construction Industry Council is Tommy Honey.

(00:23):
He saw with me this morning.

Speaker 2 (00:24):
Hey Tommy, thank sure, and Ryan, how are you doing?

Speaker 1 (00:26):
Yeah? Good, thanks mate. I've been looking at a couple
of things. Housing can censor down. You've seen those stories
about developers going tits up as well. Who's this hitting hardest.

Speaker 2 (00:38):
It's heading hardest of smaller builders. So those about half
of the builders in the survey generally in the country
have zero to five employees. So there are some big
companies around that employ a lot of people and do
very well, and they're probably riding through this crisis, you
want to call it that better than most. So if

(01:01):
you look at the smaller builders, there the ones that
are being hit hardest. And this is survey's extraordinary that
EBOSS surveys. There's a summary out, but if you're actually
look into the detail, there things that make a real
difference of what they call the forward workload or the
short shorthand that's pipeline how much work you've got coming
towards you. And for what is it thirty percent of

(01:26):
builders it's now down to zero to three months, and
some of that will be at zero. So people have
no work. There's no work out there at the moment,
and I'd say there's a sort of a perfect storm
with them. And once the economics slow down, which is
hitting us all. You know, the interest rates aren't moving,
but also in building, the material costs are going up,
so it's things have costing more. The second is the

(01:50):
kind of flat real estate market, and so people because
they can't get to sell their house for what they want,
they're just sitting and waiting. And it's the same is
true for building. So they might want to build house,
but they've got to sell their old one, so they're
not doing anything. So that kills that no one's renovating
their houses to put them on the market because they're
waiting for the market to change, So that kills that

(02:10):
part of the sector. And the third thing is the
change of government, which in itself isn't necessarily a cause
of this, but there's a bit of well I call
it wait and see on their part, the government's part,
and therefore on the whole market, everyone's just waiting and
the impact of sitting builders.

Speaker 1 (02:32):
Tommy, thanks for that update, Tommy Honey with us. He
is from his executive director at the Construction Industry Council,
responding there to a new Eboss survey six hundred and
fifty KI builders basically saying, and most importantly, as Tommy
pointed out, the pipeline of work isn't there. So if
you're a builder, or if you're a trading even and
you're looking at these construction as sorry, developers going under,

(02:56):
and your pipeline of work isn't there, what do you do?
Do you bugger off overse? I mean if you can,
if you're mobile, you don't have kids, that sort of thing.
How do you weather the storm when your you know
your runway is looking so short in front of you?
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Speaker 2 (03:14):
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