Activity outlook brighter this year


Happy New Year to you all and here’s hoping 2010 will be better for you than 2009.

From a residential building consent perspective the outlook is certainly brighter than at this time last year. We are cautiously optimistic that the numbers will slowly improve as the year progresses, but the improvement in this sector is still fragile and delicately balanced.
There are various thoughts on the number of new homes that will be consented in 2010. Some are saying as high as 20,000 while others are more conservative at around 17,000.

Whatever the number is, almost all are predicting higher levels of activity than in 2009 and that is good news, although it is still well below the sort of numbers we need to be building to maintain our long-term housing stock.
2011 and 2012 are shaping up to be potentially quite busy years (all things being equal), and this coincides with a number of other things happening in this area that may place further pressure on capability.

Restricted building work and the licensed builder practitioner scheme becomes compulsory in March 2012. By that stage the Government may have developed a leaky building resolution package with territorial authorities and home owners to repair these homes.
While this means plenty of work it gets us back into the boom/bust cycle, and we may have to stretch our capacity to cope. But I guess we will just have to wait and see.

The non-residential market has held up reasonably well during the recession, and there has been a significant amount of investment in government and local authority infrastructure, sports stadiums, community structures and the like.
However, the outlook for the next while is a lot softer, with reduced investment particularly by the private sector. The number of larger consents in the system at present is few and, as these have a long lead in time, it is likely to be the best part of 12 to 18 months before we see anything of note.

We hope the existing projects are enough to see the commercial sector through this quiet period.

On the regulatory front, a number of initiatives will be launched (or have already been launched) in the early part of this year, including:
• The National Multiple-Use Approvals process went live on 1 February. This is where a standard design repeated many times only requires one consent (issued by the Department of Building and Housing) so it does not require council approval each time — though the council will need to consider resource consents and site-specific matters.
• The Government has recently issued the Building (Minor Variations) Regulations 2009. These also came into force on 1 February.

A minor variation is defined as “a minor modification, addition or variation to a building consent that does not deviate significantly from the plans and specifications to which the building consent relates”.

This means an application for a minor variation does not have to be made in the prescribed form, and the building consent authority that grants a minor variation does not have to issue an amended building consent for it.
• The Government has also reviewed the LBP scheme and streamlined the application process and the number of licenses. The new application process will be launched this month, and we are informed it is faster and cheaper than what was proposed.
We are pleased if this is the case, as we made extensive submissions to the Government that the regime needed to be simplified.
• Work on the review of the Building Act will go on throughout 2010, and we will continue to work with the Government on it and let you know where things are heading as they develop.

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The Registered Master Builders annual conference is being held in Napier from 8-10 April. We have an exciting list of speakers with a series of workshops aimed specifically at helping you improve your business.

Jonathan Ling will share with us what Fletchers did to weather the recession so well, and their outlook going forward.

We have other topics of high interest, such as: 
• Calculating your worth, and project and succession planning, with Paul Lawrence from Master Builders Association NSW,
• Leaky buildings — what you need to know and do if you ever face a leaky building claim, by construction litigation specialist Adina Thorn LLB (Hons) and Bprop, and
• Growing your business and improving profitability — plus a lot more.

This is an event you should not miss, and I would encourage you all to attend.