TRADE Simplicity. Low wastage - Key elements in building adaptable solutions See page 8 - Bunnings Warehouse
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TRADE
FEBRUARY 2014
Simplicity. Low wastage.
Key elements in building adaptable solutions
See page 8
Check out the new tools of the
trade for 2014
The Christchurch crank up
See what 2014 has in store for the building industry
Plus bonus offers inside
Earn learning points
WITH TRADE ISSUE
It’s going to be a great year
LBP competencies covered in this edition
This first edition of Trade Issue for 2014 celebrates the potential of a • Comprehend and apply knowledge of the regulatory
very prosperous year ahead. It also embraces the full spectrum of environment of the building construction industry
issues and opportunities that are now part of the building sector that • Organise and manage building projects
promises to be one of the ‘hot’ areas leading the charge of economic • Establish design briefs and scope of work and prepare
preliminary design
growth for New Zealand. At Bunnings we try to make a point of adding
• Apply technical knowledge of construction methods and practice
substance to the debate on how we can sustain the growth challenges • Demonstrate knowledge of current building and trade practice
✃
as both the Christchurch rebuild and the Auckland expansion take
Once you have read this edition
greater hold. of Trade Issue remember to
keep a record of your learning.
It is a bit of a generalisation but people in our industry are pragmatic
1 hour of learning = 1 point
and action oriented. They like to get on with the job and in the process February 2014
give sound advice to clients. In principle this is fine but this issue
welcome
points out the perils and pitfalls of being too free with words in light of
how insurance companies are treating cost estimates for home
Contents
replacements. Things have now changed in a major way to the point
people in the industry now need to ask, and answer, a critical question:
04 New products
What is my liability if I estimate the rebuild value of houses for the 06 Building Essentials
purpose of insurance assessment? If you don’t know the answer to this
you’ll enjoy the read. 10 Building Scene
The new product we profile this issue is Innova Nuline™ Plus. This
article illustrates how building beautiful homes begins on the outside
11 Trade Advice
and then moves within. We take another look at Adaptable Buildings, 16 GIB – Achieve a better quality ceiling finish
®
and visit Northland’s Croft Sawmill. We also highlight the Reserve
Bank's announcement to exempt new housing from the bank lending
10
restrictions and the potential impact of future OCR increases.
03
Innova Building
So, again, enjoy this issue and more particularly the year ahead which Nuline™ Plus Scene
is looking like an exciting one for the industry.
Des Bickerton
Commercial Manager
08 A chip off
the new block
13 A guide to
council taming
The opinions expressed in Trade Issue are not necessarily those of Bunnings. Although every effort has been made to ensure
the accuracy of the information, the reader remains responsible for the correct selection and use of tools, materials and systems
as well as following any law or code mentioned in this issue.
2
Finally...the
WOW factor for
a home’s exterior
Create head turning good looks for the outside of homes.
People spend enormous time and money in getting the inside of a house to
perfection. The reality is the external finish is just as important particularly in creating
positive first impressions. Creating a unique and contemporary look has just
become easier. Innova is a brand new suite of products designed by BGC to inspire,
and allow you to create a new innovative and dynamic facade system. The newly
created brand has its own modern and contemporary style reflected in the recently
released marketing collateral which promotes the new fibre cement product ranges.
Perfect Joins
One of the most popular products in the Innova range is Nuline™ Plus. It's a
weatherboard-style cladding system with a perfect join and seductive look that
captures the best features of real timber.
Nuline™ Plus have been created to be the alternative to traditional timber
weatherboards. When installed they look like any other weatherboard cladding
without any of the headaches associated with natural timber
weatherboard construction.
Easy to use
The Nuline™ Plus Tongue-&-Groove system will deliver seamlessly consistent
joins throughout your project. With its slight bevel on the rear of the plank allowing
a 25mm bearing face on the stud, you'll find fixing and nailing exceptionally easy.
What's extra good about the Nuline™ Plus Weatherboard Exterior Cladding System: Spend $1,500 excl GST or more on any BGC
• Consistent and seamless joints Nuline™ Plus product between 1st February and
• Factory sealed and primed ready for painting 31st March 2014 and you'll enter the draw to win
• Quick and simple to install with manual and gun nailing 1 of 5 AEG Circular Saws worth $147!
• Highly durable with no rot or decay Terms and Conditions: Promotion runs from 1st February – 31st March 2014. To be eligible for the prize you must
• BRANZ Appraised No.640 and 641 (2009) spend $1,500 (excl. GST) or more on BGC Nuline™ Plus at a Bunnings store. All eligible customers will be drawn at the
conclusion of the promotion and the prize will be sent during the month of April. There are 5 AEG Circular Saws to be
won. Offer open to trade account holders only and there is a limit of one prize per customer account. The prize is non-
refundable, non-transferable or redeemable for cash and will not be available for pick-up at the time of purchase.
For more information visit our brand new website www.bgcinnovadesign.co.nz
or call us on 0800 424 234 or visit your Bunnings Store 3
new
TOOLS OF THE TRADE
$
56435
FULL BOAR 5.5HP
PLATE COMPACTOR
EXCL. GST
SKU00249780
• Foldable handle for easy
transportation and storage
• Trolley wheels for easy transport
• Recoil Start System
TECH SPECS
EKOLOGIX COMPOSITE BAMBOO DECKING
• Composition: 45% Plantation Bamboo, 48%
FULL BOAR 420W BANDSAW
HDPE (High-density polyethylene) from used
• Powerful 420W induction motor with plastic bottles, 7% UV stabilizers, binding agents,
2 speed belt drive offers low noise and low anti-mould guards and colour.
maintenance operation • Two sizes: 88x23mm and 137x23mm, both come
in set lengths of 5.4m
• Upper and lower blade guide adjustment
prevents twisting and helps extend blade life FULL BOAR 420W BANDSAW
• Dual dust extraction ports: 100mm outlet • Power: 420W
to keep machine clean, and 35mm outlet to • Motor Type: Induction
keep the cut clean • Blade Size: 1790x10mm, 6TPI
• Blade Speed: 11m/s
• Limit switches on both doors to provide • Cutting Depth: 125mm
user protection • Throat Capacity: 245mm
• Table Size: 300x350mm
• Table Tilt: 0-45°
• Table Material: Aluminium
FULL BOAR 750W FLOOR MOUNTED
PEDESTAL DRILL
• Power: 750W
$
30261
• Motor Type: Induction
• Chuck: 3-16mm Keyed
EXCL. GST
• No Load Speed: 180-2770rpm
SKU06290268
• No. of Speeds: 16
• Spindle Travel: 80mm
• Table Size: 290mm
• Table/Base Material: Cast Iron
• Base Size: 460x272mm
• Weight: 55kg
• Base Material: Cast Iron
FULL BOAR 750W
FLOOR MOUNTED PEDESTAL DRILL FULL BOAR 5.5HP PLATE COMPACTOR
• Freestanding heavy duty pedestal drill press with powerful
750W induction motor
$
373 04
EXCL. GST
SKU06290272
• Type:
• Horsepower:
• Engine Cool Type:
4 Stroke
5.5HP
Air Cooled
• Enables greater efficiency, accuracy and ease of use for • Cylinder: Single
• Displacement: 163cc
precise drilling applications particularly with use on hard
• No Load Speed: 3600rpm
materials such as metal/hardwood, bulky pieces and • Compaction Depth: 20cm
applications where multiple drillings are required • Fuel Tank Capacity: 3.8L
• The 360° rotating table top and easy rise and fall allows fast • Frequency: 5,900vpm
and simple alignment of the workpiece • Plate Size: 53 x 37 cms
• Plate Thickness: 6mm
• Includes 16mm keyed chuck with 85mm spindle travel • Lifting Lugs: Yes
• Weight: 57Kg
4
$
3747 All roads lead
to Bunnings
EXCL. GST
88 x 23mm SKU00221327/
SKU00221324/SKU00221332
$6.94 per lineal metre
$
6094 EXCL. GST
137 x 23mm SKU00221319/
Takanini
SKU00221313/SKU00221316
$11.29 per lineal metre
The 24th Bunnings Warehouse store opens
on a prime location in South Auckland.
EKOLOGIX COMPOSITE BAMBOO DECKING
Its unique design of bamboo and recycled plastic accounts for more than 90% of its
composition which helps delay the weathering process, so it is less likely to splinter,
cup or warp. Other features include:
• Mould, rot, decay and mildew resistant
• Made from FSC® Certified plantation bamboo and recycled plastic bottles
• No staining or oiling required
• Commercial anti-slip rating (R11)
• Now available in three new colours: Red Rock, Mountain Oak and Ash Silver
$
5215 EXCL. GST
SKU00239599
The Great South Road is one of South Auckland’s landmark routes. Just opened on
a key piece of this famous road is another ‘must stop’ in the making; namely
Bunnings Takanini that Tradies and D.I.Y.ers will soon be calling one of their
favourite destinations.
BAHCO 22” INSULATION SAW
• The WT-toothing (wave toothing) is especially Located at 167-179 Great South Road nearby an ever increasing range of specialty
designed for cutting insulation material shops and retail developments, the Takanini store is a great boost for the area.
• Re-sharpenable blade with rust and corrosion protection Over 151 people are employed on site to make those looking for building and
• Tested on various insulation materials construction products and home improvement solutions all the more engaging.
It also has under one massive roof everything one would need including drive thru
• Low friction and creates less saw dust
trade yard and undercover parking.
With a total area of 17,000 square meters – 10,000 of which is trading space –
the facility has parking for over 200 and an extensive covered nursery and
landscaping offer.
TAKANINI
BAHCO SHARPENER
$
17 34 • Hand held sharpener
• Easy operation
GR
EXCL. GST
AH
AM
OAD
RO
SKU00239634 • Tungsten carbide blade OUT
HR
AD
AT S
GRE
• Tough, durable and long lasting
• Knuckle protection for user safety PH: 347 1300
5
essentials
BUILDING
EVERY DAY LOW PRICES ON EVERYTHING YOU USE EVERY DAY
18V Drill Driver
System compatible.
SKU00248986
$
260EXCLUDES GST
185mm
Circular Saw
1050W. SKU00236024
$
13042
EXCLUDES GST
18v Screw Gun
2 x 3ah Lithium ion
batteries. SKU00242623
$
95565
EXCLUDES GST
18V Multi Tool
2 x 1.5AH lithium ion
batteries. SKU00318819
$
260EXCLUDES GST
125mm
Angle Grinder
3 discs. SKU00111399
$
120 EXCLUDES GST
Random
Orbital Sander
300W. 125mm. SKU00304016
$
130EXCLUDES GST
18kg
Demolition Breaker
1750W. Quick release bit
lock. Anti-vibration system
SKU00233923
2000W Heat Gun
LED display. SKU00319982
$
19913
EXCLUDES GST
$
43391EXCLUDES GST
125L
Cement Mixer
370w. SKU00238640
$
60696
EXCLUDES GST
Terms and Conditions: Not all services and products featured are available in all stores, but may be ordered. See in store for product availability. Shelf prices may be lower than advertised to ensure lowest prices every day.
s 8m Tape Measure
32mm wide. SKU00192318
$
34
EXCLUDES GST
11 80m
Builders Line
SKU00255713
$
1737 EACH
EXCLUDES GST
Laser Line Set
SKU00305886
$
34696 EXCLUDES GST
20oz Claw Hammer
Nylon grip. SKU00127078
$
6817
EXCLUDES GST
550mm Hand Saw
8 point. Hard point.
SKU00445162
$
1561
EXCLUDES GST
Mobile Scaffold Base Pack
230kg rating platform (shaded area).
Optional extras (as shown) sold separately:
Toeboard Pack $99
Riser Pack $299
$
477 39 $
173 04 $
60783
Adjustable Wheels
18V Tradesman pack of 4 $399
Hammer Drill Wheelbarrow Tower Pack $549
2 x 4.0ah Lithium ion Extra heavy duty. Fully Stabiliser Pack $549
EXCLUDES GST
batteries. SKU00316876 EXCLUDES GST assembled. SKU00240229 EXCLUDES GST SKU00183637
5 Piece
Insulated
400ml 5.56 Screwdrivers
SKU00268542 SKU00273241
$ 17
6 $
17304 $
2493
166 Piece
Socket Set
1/4, 3/8 & 1/2"
EXCLUDES GST SKU00228312 EXCLUDES GST EXCLUDES GST
We reserve the right to restrict the purchase of commercial quantities. All prices are exclusive of GST. Bunnings Trade Promise terms and conditions apply. See trade desk for details. Prices valid to Monday 31st March 2014.
A chip off
the new block
There is a certain sense in going full circle when an innovative technique
known as Laminated Veneer Lumber (LVL) is being used to house a sawmill.
In the June 2013 Trade Issue we highlighted the introduction of what we’re calling As Neil explains it, they went through a full pricing exercise with steel and found
Adaptable Building Solutions utilising Laminated Veneer Lumber (LVL) framing. that LVL compared well dollar wise. From there the added benefits made the
There are a whole host of benefits to using this process as is becoming evident selection a ‘no brainer’.
with the largest LVL project Bunnings has been involved with. Namely a new mill “Given the nature of the operation the chances of having parts of the building
for a Northland company called Croft Pole and Timber. broken, or damaged, is fairly high. One of the key considerations for going down
As well as being a pioneering site and future ‘show room’ for LVL (the Croft site is the LVL route was the ease of repair where one can simply replace the area in
adjacent to Bunnings located on State Highway 1 in Kauri, just north of question with a new piece of wood.”
Whangarei), the project has seen two brothers cooperating to create a new area of “A saw mill is also a very noisy place so having the sound absorption qualities of
opportunity for a business that has already involved four generations. wood is a real plus. Noise doesn’t reverberate as it would with a steel structure. LVL
is also exceedingly strong which makes it just perfect for a whole host of different
My business could become industrial solutions.”
more ‘adaptable’ by moving
into commercial construction
thanks to LVL.
A family affair
Darrell Croft runs Croft Pole and Timber. When looking at building options to
house the new mill – that would allow the business to expand beyond its
traditional base of creating wood, sawn board and poles and move into wooden
framing for houses – he turned to house builder brother Neil for suggestions. After
learning about the product at a Bunnings’-sponsored seminar, Neil sold the virtues
of an adaptable building.
“It is a brilliant product to work with. LVL is a local product, harvested by local
people, trucked by locals and then processed by New Zealanders. All of that is
great for the economy. Being made from sustainable and renewable resources is
wonderful for those of us concerned about the planet’s future well being.”
For more information visit your local Bunnings Trade Desk or talk to your Account Manager
Get to know your
Account Managers
Profiling Howard Yates
If you go to one of Howard’s Trade Breakfasts, you know the meat
is going to be good! Starting out as a butcher, Howard joined
Bunnings in 2007. He’s into hunting, shooting and fishing, so his
stories are also going to be legend! However, it’s his “relationships
with his Trade customers that gets him up for the day”. He loves
their challenges and the solutions he can offer them.
Howard Yates
Phone 027 246 2012
Bunnings Trade Account Managers
AREA SALES MANAGERS East Tamaki Mike Bush
Matt Cardey Trade Centre/Manukau 027 492 9019
027 652 5268 Sam Marcel
027 498 1796 Napier/Hastings
Ian Sill
Tim Trowell Wini Ryan 027 490 6529
027 200 2034 027 246 2003
New Plymouth
The word adaptable really
East Tamaki Danny McVicar
Troy Taylor Trade Centre/Papakura 027 246 2011
Kent Silby
027 200 2032
captures the essence of 027 289 5576 Hawera
Grant Cambie
Laurie Stowers 027 445 2917
Gareth Osborne
what we’re offering as it can 027 839 0109
027 246 2010
Tony DeCleene
Feilding
Rowan P Ellison
handle any specification in
021 528 840 027 446 1786
Kaikohe
Michael Eyre Pukekohe Palmerston North
terms of width and span. 027 475 5019 Carla Hira Vanessa Linton
027 246 2015 027 445 0957
Whangarei
Matt Oliver Te Aroha Howard Yates
Richie Blake 027 246 2012
027 499 0812
027 230 8569
Living up to its reputation Kauri Naenae
Whangamata
Steve Jeffery Matt Jenkins
Bunnings Kauri-based Account Manager Stephen Jeffery said the building project Kevin Pennell
027 243 1932
027 473 2516 027 436 0293
and process went exceedingly well. Heinz Baker
Silverdale Barry Leighton
“LVL really lived up to its reputation. Everything is pre-cut, to the correct Blair Wilcock 027 493 2018 027 442 0234
027 436 2002 David Turner
dimensions, numbered and labelled so it then is just a matter really of screwing or Waikato
Glenfield/Silverdale/ Alan Miller 027 445 0955
nailing everything together. Simplicity is the key as well as the substantial time North Shore 027 499 7165 Paul Eynon
savings you get with this type of construction. You also significantly cut back on Jon Copeland 027 445 0954
Hamilton
027 703 1076 Darren Mayo
wastage as everything that arrives is going to be used. Being able to watch the new Brian Williams
Forrest Jin 027 246 2008 027 442 5467
mill take shape right next door to us has been really rewarding." 027 484 2591 Te Awamutu Gary Sim
North Shore Gary Dunlop 027 246 2014
Scott Godkin 027 457 9979
027 431 8504 Derek Rodger
Cambridge 027 102 041
North Shore/Glenfield Bruce Robertson
Alan Zhang 027 475 8661 Blenheim
027 246 2001 Stuart Washington
Te Puke
027 481 0557
Dean Cubis
East Tamaki 027 487 2697 Nelson
Trade Centre/Henderson
Mt Maunganui Mark Culverwell
Denis Richardson 027 652 5271
027 498 1948 Dean Hollamby
027 228 6462 Dunedin
Henderson/Mt Roskill Aubrey Gray
Greg Dalley Whakatane
Greg Diemar 027 459 1738
027 200 1964
027 490 4302 Hornby Christchurch
East Tamaki Trade Centre
Trade Centre/Botany Rotorua
Andrew Chadwick Martyn Hugo
Ashley Chetty 027 246 2006 027 240 8950
027 498 1942
Mark Canning Jeff Scott
Mark Haddon 027 498 7136 027 503 6046
027 453 7211
Gisborne Chris Sunman
Joanne Smith Terry Pointon 027 260 2468
027 246 2002 027 445 4375
Ashburton/Hornby
East Tamaki Trade Centre Taupo Christchurch Trade Centre
Derek Wang Mel Hoverd Shaun Parker
027 459 1734 027 435 9054 027 702 2129
9
scene
BUILDING
by Rodney Dickens NUMBER OF CONSENTS FOR NEW DWELLINGS
TOTAL DWELLINGS APARTMENTS NON-APARTMENTS
Exempting new housing from lending restrictions
Monthly Annual Monthly Annual Monthly Annual
The announcement by the Reserve Bank that new housing will be exempted from the
Jan-12 1,098 13,893 198 1,264 900 12,629
bank lending restrictions marks a victory for the industry. This is especially in light of
Feb-12 1,204 14,124 62 1,237 1,142 12,887
the Master Builders Federation survey finding that the restrictions had resulted in a
25-27% fall in inquiries for building companies. Mar-12 1,559 14,596 165 1,362 1,394 13,234
The exemption gives new housing a competitive advantage over existing housing. Apr-12 1,230 14,899 138 1,466 1,092 13,433
More significant positives for residential building prospects are net external migration May-12 1,372 15,132 68 1,468 1,304 13,664
that could add over 35,000 to the population this year, increased Canterbury Jun-12 1,277 15,414 118 1,526 1,159 13,888
rebuilding and the government housing initiatives that are discussed below. Jul-12 1,478 15,722 235 1,631 1,243 14,091
Aug-12 1,513 15,726 140 1,592 1,373 14,134
One day mortgage interest rates will increase
Sep-12 1,520 16,000 186 1,656 1,334 14,344
However, exempting new housing from the lending restrictions increases the upside
Oct-12 1,639 16,401 168 1,735 1,471 14,666
risk for interest rates, as do the other positive factors discussed above. Residential
Nov-12 1,658 16,675 39 1,665 1,619 15,010
building is quite labour intensive, while in a developed economy labour costs are the
largest driver of general price inflation that the Reserve Bank aims to control. Leading Dec-12 1,381 16,929 232 1,749 1,149 15,180
indicators of employment growth, like the ANZ and Department of Labour surveys, Jan-13 1,312 17,143 58 1,609 1,254 15,534
suggest that employment growth is accelerating quite sharply. Feb-13 1,542 17,481 142 1,689 1,400 15,792
There isn't much spare capacity in the labour market so strong employment growth is Mar-13 1,475 17,397 16 1,540 1,459 15,857
likely to trigger OCR hikes reasonably early this year. The Reserve Bank has Apr-13 1,755 17,922 214 1,616 1,541 16,306
consistently and incorrectly predicted significant upside in the benchmark short-term
May-13 1,971 18,521 219 1,767 1,752 16,754
wholesale interest rate over the last several years, as shown by the coloured lines in
Jun-13 1,539 18,783 160 1,809 1,379 16,974
the chart. This wholesale interest rate is driven by the OCR and largely drives the
floating and short-term fixed mortgage interest rates that are the cheapest rates Jul-13 1,893 19,198 218 1,792 1,675 17,406
available. If it finally increases this year it will have a significant negative impact on Aug-13 1,760 19,445 127 1,779 1,633 17,666
residential building with a lag of 10-12 months. Sep-13 1,860 19,785 156 1,749 1,704 18,036
For the parts of the country not benefiting from the government initiatives the net result Oct-13 1,891 20,037 133 1,714 1,758 18,323
could be downside for residential building starting late this year. Nov-13 2,267 20,646 492 2,167 1,775 18,479
Source: Statistics New Zealand
More government housing initiatives
90-Day Bank Bill Yield & Reserve Bank Forecasts
21 Special Housing Areas covering 15,500 housing lots have now been approved in 9
Auckland with more to be announced in March, while the Minister of Housing has
8 Date of RB
announced plans for Housing Accords in eight other areas: Christchurch, Wellington, Forecasts
Hutt City, Upper Hutt, Porirua, Kapiti, Tauranga and Western Bay of Plenty. 7 Dec-09
The government initiatives should start to boost building in Auckland later this year 6
Dec-10
and in the other areas in 2015. What has been done in Auckland so far is impressive Dec-11
in terms of the number of potential new housing lots, but it may not result in a 5 Dec-12
Dec-12
sufficient fall in new housing costs to mean building increases in line with the 4
increased supply of land available for building.
3
2
*Rodney Dickens runs Strategic Risk Analysis, a property and economic research company. Mar-00 Mar-03 Mar-06 Mar-09 Mar-12 Mar-15
Visit Rodney’s website www.sra.co.nz to sign up for free property and economic reports
10e Every issue of Trade Advice will cover a number
of topics that effect how we as an industry
go about our daily business. If you have any
subjects you would like to discuss or have a
case history you would like to share email
us at comment@tradeissue.co.nz
TIM,
TEAM MEMBER
advice
TRADE
The Christchurch ‘crank
up’ is about to begin
2014 is destined to be the year when the
Moreover, that’s just one subset of the repair and construction projects in the
pipeline. There are, for example, 14,000 or so seriously damaged houses where
repairs are being handled by the insurance companies. Townsend estimates that
only about $1.5 billion of a total of $24-$26 billion needed to repair Canterbury’s
housing stock has already been spent.“We’re only just starting. I estimate we’re
only 8% into it. It is going to really crank up this year, led by housing, because
city accelerates into real recovery mode. settlements are happening now.”Townsend reckons repairing and rebuilding
Canterbury’s houses is a seven-year process. Completing the commercial rebuild
By Nikki Mandow could take 20-25 years.
Canterbury Employers’ Chamber of Commerce Chief Executive Peter Townsend
admits to frustrations but is adamant the coming year holds big promises of moving We’ve only just begun to build
into full swing reconstruction. The National Construction Pipeline report, released in December, predicts a
He cites residential housing as proof of a change of momentum. Of the 25,000 shorter timeframe. It anticipates total building and construction work in Canterbury
Christchurch homes with more than $100,000 of damage, he says, only 900 have will almost double between 2012 and 2015 from $4.3 billion to $8.2 billion. It sees
already been repaired. Of the remainder, 8,000 have been “cash settled”, meaning residential activity peaking in 2015, and then non-residential construction
the owners have already got the money from their insurance company and are just becoming more dominant, before the overall rate of construction begins to decline
waiting for the consenting process to be completed so repair work can start. reasonably rapidly.
Ironically Townsend’s own house is one of those. He lodged his resource consent The majority of earthquake-affected residential work is
just before Christmas and, if all goes well, hopes work will start sometime in March. forecast to be completed within five to six years
The other estimated 7,999 houseowners will be on a similar path, he says, looking of the earthquake.
for work to start this year.
“I know it takes 4-6 months from the time you get a cash settlement until
you pour the concrete. You’ve got 8,000 people with money in the
bank looking to repair their houses this year.”
11Non-residential building work will also grow hugely from $2.1 billion in 2012
to $4.7 billion per year for the three years 2015–2017.
Work on the Government’s 17 so-called “Anchor Projects” in the central city will be
a big part of this. In his state-of-the-rebuild wrap-up at the end of 2013, Canterbury
Earthquake Recovery Minister Gerry Brownlee said 2013 had been a year focussed
on buying land, planning, proposals and contracting. In contrast, 2014 should see
construction start on some of the projects, including the $217 million Metro Sports
Facility. He maintains by the end of this year the change will be hard to believe.
“Cranes will dominate the city next
year and for several years to come.
The impact of the upcoming
construction phase cannot be
underestimated – the amount of
labour, material and effort that the
city will require will be incredible.”
Gerry Brownlee
With any major project there are potential roadblocks and Townsend believes there Creating a number of win-win situations
will be three ‘cascading constraints of construction’. Productivity Partnership Spokesman Andrew Reding says the aim of the
1. Insurance settlements. Although here the process is relatively well advanced. forums is to synchronise major projects and encourage the efficient use
2. Resource and building consents. After considerable problems, culminating in of what will be scarce resources.
Christchurch City Council being stripped of its accreditation to issue building “Better information leads to better decisions,” Reding says, “and better
consents in July 2013, Townsend believes the process is starting to ramp up. coordination should help alleviate the risk of the boom/bust cycles so
The sheer volume of work that needs consents is still a major issue for projects. prevalent in construction.”
3. Resources: human, material and financial. In an attempt to prevent resource Meanwhile, the Department of Immigration’s 'Canterbury skill shortage list'
bottlenecks building up over the next few years, the Productivity Partnership
identifies urgent needs in nine different construction skills areas, seven
in 2012 set up “procurement forums” in Auckland and Christchurch trying
engineering specialties and 15 trades categories. Townsend estimates
to encourage infrastructure investors to talk to each other about projects and
the rebuild needs an additional 25,000 skilled workers, and so far around
coordinate starting times if possible.
3000 have arrived.
One possible solution being proposed by the Canterbury Earthquake
Recovery Authority’s (CERA) is Collaborate Canterbury, an initiative which
aims to bring together construction sector businesses from across New
Zealand and connect them with Canterbury companies. Townsend sees the
initiative as a way for companies outside Christchurch to grow their
businesses and help meet the increasing demand.
In one recent example, a firm of architects in Nelson teamed up with a
practice in Christchurch. It’s a win-win for both, Townsend says. “The
Christchurch firm was flat out and now is contracting out work to Nelson.
There are six architects in Nelson designing houses in Christchurch.
It builds scale for both companies.”
"With accommodation for incoming workers still a critical issue in
Christchurch, a solution which sees building-related staff based outside
Christchurch is particularly beneficial," he says.
By the end of 2013 about 760 companies had registered with Collaborate
Canterbury, most of them firms outside Christchurch looking for
opportunities from the rebuild.
12A guide to council taming
They’re just doing their jobs and often very well.
Yet sometimes their attempts at being overly
efficient can raise hackles.
By Louise Swann
Many of us have experienced the frustration of dealing with local council. When it's
one of our jobs, their behaviour can seem downright obstructive. However, they
do have a role as "the last man standing", and have to protect the liability of
the ratepayer.
Councils are required to operate effectively and consistently when performing their
Here was the outcome
functions. Anecdotally, we’ve all heard stories of how some behaviours among
some councils range from being overly bureaucratic to what at times would seem Section 94(1)(a) of the Building Act requires that a council must issue a CCC if it is
to exceed the requirements of the law. These behaviours incur unnecessary costs satisfied on reasonable grounds that the building work complies with the building
to the industry and building owners. However, if you know the law and are able to consent. In this case council decided that the flashings had to be in accordance
with the consent; nothing else would do!
apply it in a professional and analytical way, you can reduce the bureaucracy and
the costs to your business and clients. In the course of a project, changes occur particularly in material substitutions.
These types of changes are regarded as minor variations and there is a process to
A little common sense and be followed. This process involves providing as-built drawings and any additional
information that council can use to establish that the building work is complying
understanding the rules helps with the building code and to amend their records.
win the day. Yet in this case the council refused to follow the guidance provided by MBIE. In
addition, council did not address each of the consents separately. This was noted
by the Determinations Manager who commented that the council raised issues in
Failure to use MBIE guidance
relation to the individual consents in an ad hoc basis that relates to only one or
This month’s Determination relates to the failure of council to deal with other of the buildings and did not adopt a cohesive approach.
a minor variation. In order to resolve the matter, the Determinations Manager engaged an expert to
It involved a large commercial building project that had been constructed over a assess the performance of the membrane tile system. He considered this advice
number of years in the later part of the last decade. The project was covered by a along with additional information provided by the hearing. On the basis of this
number of building consents. CCC had yet to be issued for three of the consents, information, he concluded that the council was wrong to have issued a notice to fix
in part because the roof flashings differed from those specified and that the butyl rubber membranes as applied to the terracotta tiles complied
in the consents. with the building code.
The flashings were butyl rubber instead of the soft lead. In late 2012 Monier Finally after a number of years the issue was resolved but it had cost the owners,
NZ wrote to the council saying that the company accepted the use of butyl the companies and even the ratepayers unnecessary cost. This cost could have
rubber flashings. been avoided if council had followed MBIE advice.
However in December 2012, the council wrote to the owner saying “it could not
Lessons for the learning
make an informed decision”. In January 2013 a compliance pathway was proposed
1. Always make sure the information is suitable. A commonsense approach
which entailed:
should be adopted. Information provided to councils needs to be reliable,
• Site inspections by contractors and statement of compliance based on replicable and relevant.
their inspection.
2. Be timely and keep the momentum going . Within two years of a building consent
• Provision of as-built details and assurance that any guarantees would apply. being issued, the council has to decide whether or not to issue a CCC. In the
• B2 modification due to the time elapsed since the installation of the tiles case of this building project over 5 years had elapsed.
and membranes. 3. Be logical and keep it simple. Where multiple consents are involved keep the
This information was provided and the council requested further clarification in records and the management of them separate, logical and organised.
respect of the drawings. Despite this, the council was unable to conclude that 4. Follow MBIE guidance. Even with minor variations make sure information is
the building work complied with the code. What made matters more confusing accurate, relevant and assists the council to do make their assessment.
was that the council responses were provided generally in respect of all three 5. Make sure that the drawings are specific or if they are indicative, label them as
building consents. It was impossible to nail down and identify the areas of indicative. A supporting letter outlining your statement of compliance in respect
council’s concern. of the relevant building code clauses as well as labeled photos will also help.
6. Develop your knowledge. Understanding the law and how the regulatory
Finally the council issued a single notice to fix covering the three building
framework operates limits both bureaucracy and over expenditure.
consents. It noted that the building work was not in accordance with the original
building consents. The specified remedy was to complete the building work and For more information on this determination go to www.mbie.govt.nz (Determination
2013/075). Information on building consent amendments can also be obtained on
specifically the roof flashings in accordance with the approved plans and www.mbie.govt.nz “Guide to building consent amendments”.
specification. That is, the council wanted the butyl rubber membranes to be For help in working with your council contact Louise Swann from The Building
removed and replaced with soft lead flashings. Business on louise@thebuildingbusiness.co.nz
13Economic optimism as readings comes with good news in the employment sector. In the year to
September alone the number of jobs rose by almost 2%, or 30,000 positions, with
the Year of the Horse full-time workers more in demand than part-timers. Canterbury put on 16,600 new
jobs, and Auckland and Wellington an extra 9000 and 5300 respectively. Treasury
kicks into stride expects unemployment to fall below 6% early this year.
Wages were up too. The most recent Statistics NZ figures show average hourly
earnings rose 2.6% in the September 2013 year (up 71 cents to $27.98). Figures
The fiscal ‘tea leaves’ related to the state of the were higher in the construction industry, where hourly rates rose 5.6 percent to
New Zealand economy are loud and clear. Good $25.72, the biggest annual increase since early 2009.
times lie ahead especially if you’re in construction.
By Nikki Mandow
The headlines speak of positive and buoyant times and the indictors concur.
“It all adds up to a construction
Business and consumer confidence is up, construction is increasing, and industry heading into 2014 with
unemployment looks set to go below 6%. The latest OECD report puts
New Zealand as one of the fastest-growing economies in the developed world. all guns blazing. I don't see too
Rather than pure puffery there is substance to these claims.
New Zealand’s economic growth, says the OECD, is forecast to be around 3% per
many negatives.”
year out to December 2015. In contrast, other developed countries only manage a John Pask – Business NZ Economist
2.3% average. Treasury’s best-case scenario sees growth for the 12 months to
March 2015 hitting 4.4%.
There are other ‘hot’ sectors contributing to this surge but clearly construction is Among the rewards are some risks
leading the charge. The latest GDP figures show construction activity increased Strong growth and an active job market always carry with them an inflation risk -
13.8% in the September 2013 year. This is the highest annual level ever recorded and the likelihood interest rates will also rise. The Reserve Bank has already
and experts maintain this isn’t slowing down any time soon. signalled that rises are almost inevitable this year. Pundits say these will probably
Building activity is forecast to rise to an unprecedented $32 billion in 2016 and come sooner rather than later, and could be fast and quite substantial.
continuing until 2019, says the Building and Construction Productivity But the main possible risks to a construction boom are shortages of skilled labour
Partnership’s National Construction Pipeline report released late last year. The and possibly building materials, says Building & Construction Productivity
report warns the challenge for the sector won’t be keeping the growth going, but Partnership spokesman Andrew Reding.
sustaining four or more years of 10%+ growth.
He says there are several factors which will affect whether New Zealand can get
Christchurch has been in the spotlight with the anticipated $40 billion rebuild but enough tradespeople, engineers and builders to meet the demand. These include
the biggest growth will happen in Auckland. An anticipated 1/3 of all building work the mobility of existing New Zealand workers, what overseas labour is available
in the country over the next five years will happen in Auckland. and whether workers coming to Auckland and Christchurch can find
somewhere to live.
Many regions are the engine rooms for growth
However, one advantage for New Zealand is that the rest of the world is not in a
In itself this isn’t surprising. Auckland was the fastest-growing region in New construction boom, which should make it easier to attract foreign workers.
Zealand from 2006 to 2013, according to the new census figures, with the
On the materials supply front, while it was sometimes hard for building supply
population increasing 8.5% to 1.4 million. With the building sector only
companies to meet demand during the 2006-2007 construction boom, the
now starting to pick up post the 2008 global financial crisis, there’s a lot of
situation should be easier this time. The strong New Zealand dollar will make
catching up to be done. The Productivity Partnership report says residential
imports cheaper. Plus there is spare capacity in most segments of the New Zealand
housing will drive Auckland construction growth, going from $2.9 billion-worth in
supply chain, says Bruce Kohn, Chief Executive of the Building Industry
2012 to $7.2 billion by 2018.
Federation. Kohn also warns the Government needs to make sure imported
Migration patterns are expected to bolster this trend. The end of 2013 saw record building materials are high quality and comply with
net monthly migration gains which, if continued at the same level in 2014, could New Zealand Standards and the Building Code.
see up to 30,000 more people arrive than leave New Zealand over the next year.
Local and central government encouragement of house building, and demand by
tenants for their landlords to upgrade buildings beyond minimum earthquake
codes, will also bring growth.
The level of optimism is reflected elsewhere with both business and consumer
confidence up. The Westpac-McDermott Miller's consumer confidence index hit a
four-year high in the December quarter. With confidence comes more expenditure.
Figures from Eftpos payments company Paymark show year-on-year spending
over its network rose 7.7% during the first two weeks of December 2013.
Business confidence is also up across a range of sectors, including construction,
manufacturing, agriculture and services, and is expected to remain strong this year.
Companies in growth mode are more likely to pay their bills on time, and a Dun &
Bradstreet survey says 61% of invoice payments in the September quarter were
made within 30 days, an improvement of 1%. Part of the positive confidence
14Loose lips could create
major liabilities
Much has changed as a result of the Christchurch Meaning, as a trades person giving advice you’ll have to very carefully work out
earthquakes particularly how insurance the replacement cost of a home, or rental, when your next insurance premium
falls due.
companies are now treating replacing homes. To help in the process, insurers have provided online 'calculators', which
Giving advice freely could be very costly. theoretically will calculate the cost of replacement. A lot of questions will be
By Ben Rickard asked and elements itemised down to specific details to help in getting the
information right. Be prepared to be asked about construction type, materials,
For many years now people have insured their houses based on replacement costs, cladding, ceiling height, roofing materials, the slope of the land, the area of the
and also relative to its area in square metres. On that basis, insurers agreed to home, heating, decks, sheds and even down to queries about pools, fencing,
replace the property to the same area, regardless of how much it cost. It was paving and driveways.
relatively simple, straightforward and not fraught with issues of liability. You will also need to consider the cost of demolition, professional fees and the
Things have now changed in a major way to the point people in the industry now particular terms of your policy (such as whether it includes or excludes GST).
need to ask, and answer, a critical question: What is my liability if I estimate the
rebuild value of houses for the purpose of insurance assessment? A word of caution
Post-earthquake and in the wake of major claims, companies have discovered that The point of this exercise is that the sum insured that is selected will be the most
the rate per square metre varies enormously and, fundamentally, their actuarial that a company will pay. If the insurance is for more than it costs to replace the
models were faulty. Ironically, they’re now stepping back in time to how home, the policy says the insurer is only obliged to pay the cost to rebuild the
assessments were made 20 years ago and how they’re enacted in most other home as it was.
countries by dealing with what is called a replacement sum insured. This is the tricky bit and where issues of liability come to the fore. As a builder
you may be asked by customers, friends, family or neighbours to tell them or
help them work out a replacement cost.
Be very careful! If the sum insured you suggest is not enough if there’s a total
loss (say a fire), then you could be held liable for the difference. Sadly there is no
insurance for giving insurance replacement cost valuations. If you start doing this
you do so at your own risk! We highly recommend that you check the terms of
your liability insurance to see what’s covered and what’s not in regard to
professional advice.
Builtin New Zealand is a specialist in construction liability insurance,
with policies tailored to meet the needs of builders & tradespeople.
If the sum insured you suggest is For more information visit www.builtin.co.nz/Insurance, email Ben Rickard
at ben@builtin.co.nz or call him on (07) 579 6259 or 0275 212 014.
not enough you could be held
liable for the difference.
15Everything you
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*Terms and conditions apply. See Trade Desk for details.You can also read
