Lessons from America


The International Builders Show run by our counterparts in the United States, the National Association of Home Builders, is the largest construction exhibition in the world.
The 2008 IBS was held in Orlando in mid-February, and the Kiwi contingent was probably the largest international one attending the event, with some 40 builders, suppliers and other stakeholders having a look around.

Carters took a bunch of builders and a couple of suppliers across, as well as Deprtment of Building and Housing deputy chief executive David Kelly and myself.
Carters chief executive Stu Munro was a great host of his particular tour group. PlaceMakers also took a group over, mostly a mix of their joint venture partners plus some building industry representatives.

Registered Master Builders also had a few members attend as part of a smaller group we had organised. So, all in all, it was a good New Zealand representation.
I took away five lessons from the trip:

New Zealand high building quality: While you might think, given the amount of money that flows around in the United States, that they would have a high quality building industry, all the Kiwi builders I spoke to said how surprised they were at the poor quality levels — even in the US$4.8million New America Home.

So, we should be proud of the quality levels we generally build to in New Zealand, a reflection that we still have good levels of apprenticeship training and still turn out high quality builders.
Green building is big:

Fads come and go, but green building is here to stay. While things are still becoming clear about how green New Zealand might go (particularly around where the Building Code will take things in that regard), the industry does need to get its head around how to best manage this green building phenomenon.

A worldwide slowdown is happening:

In some markets in the United States, residential building volumes are down to 30% of what they were two to three years ago. We are seeing a softening here in New Zealand, certainly not to the same levels over there, but we do need to be cautious about the market strength over the next 12 months or so, given the international trends.

Our builders need to be actively managing their cashflows to ensure they stay on top of things.

Market size differentials are huge:

It becomes very clear in the United States how big their markets actually are. We are 1% of their size! On the one hand the huge market size means American builders (and suppliers and designers) are able to specialise in small niche markets (eg, building houses for the “50+” market).

On the other hand, our small market size here in New Zealand means we need to be better generalist builders, and we are also better innovators. Big is not necessarily best!

Associations have significant roles to play:

My final lesson from the United States is that industry associations have a huge role to play in ensuring the industry they represent is working as effectively as possible.
We have critical roles to play in things such as building codes and regulations, safety standards and training, industry skills and training (technical and business), green building — and the list just goes on.

Can I extend my personal thanks to Stu Munro and his team from Carters for hosting me on their particular tour. I enjoyed the trip immensely, and will be applying lessons learnt from it for many years to come.

Finally, the next International Builders Show will be in Las Vegas in 2009, and we are already looking at an RMBF members tour to that event. Watch this space!