Downturn in work for builders?

Press, 16 January 1986, Page 6

Downturn in work for builders?

PA Wellington House builders and construction contractors can expect a downturn in work this year, according to the President of the Wellington faster Builders Association, Mr Graham Shaw. But he said contractors in the heavy commercial sector building high-rises could expect the same high level of activity, particularly with the expansion of the Government sector. “Last year all the sectors were busy, including house renovations, and in light and heavy commercial we had a particularly high level of work,” he said. “The predictions for this year are somewhat

ferent. There is a lot of pessimism in the housihg market at the moment.” Mr Shaw said interest rates were stopping sales in the low income area. There was plenty of money around but people could not afford to borrow it. Mr Shaw said he thought the Government would make an announcement in March concerning first home buyers and that could be causing a slow-down in the market now. Mr Shaw said the Housing Corporation was the only institution lending at interest rates first homeowners could afford. However, the house renovation market was good

with people altering their homes rather than selling. He said there was a mixture of predictions on the effect the goods and service tax would have on the housing market. “There is talk of a flurry before GST comes in, but a general feeling of pessimism after it is introduced.” This combined with a general downturn in the economy would put housing at a low level However, there was some indication that the higherSrice home market was in a etter state. Buyers and sellers in that market generally had a house to sell. Activity in the heavy commercial area would

stay at the same high level for the next 12 months. Some contractors were quiet now but they would be starting work again in the next two to three months. Mr Shaw said there was still a shortage of carpenters. Many had left for other trades with better pay and conditions. A 30 per cent pay increase had not had an effect on the market yet. But with a downturn in the housing market, the shortage in heavy construction could change. There was an interplay between the Australian and New Zealand markets. When both were doing well New Zealanders leftjiTor

work in Australia because of better pay.

He said there were indications that light commercial market two-storey buildings, factories and warehouses would “soften” this year.

While it had been busy last year, some contractors were now starting to look round for work. He expected GST would have an effect on this sector.

There would be no unemployment this year, even if the industry contracted. On big construction sites deadlines had sometimes been extended because of the shortage of carpenters.