$683m building boom breaks record

BUZZING: Priority One chief executive Andrew Coker.

The Bay of Plenty's building boom is going gangbusters with building consent levels hitting a record high of more than $683 million.

In the 10 months to October this year the Tauranga City Council and the Western Bay of Plenty District Council issued $137.9 million more in consents than any year since Priority One records began in 2003 - a 25 per cent increase in the value of consents issued.

Together they amounted to $683.51 million compared to $545.61 million for the same period in 2004.

Last month alone the two local authorities issued 389 consents worth $91.6 million compared to 287 worth $48.3 million in October last year.

The news comes after the Bay of Plenty knocked Auckland off the top spot as New Zealand's best-performing region according to the latest ASB/Main Report Regional Economic Scoreboard thanks to booming business confidence, a sizzling job market and a record year for real estate agencies.

Mike Way, the president of the Western Bay Certified Builders Association, said the industry was experiencing "one of the busiest times that I can remember".

"I would need a crystal ball to know how much longer the boom will continue but I think there's every indication it will last well into 2017.

"Every sector of the building industry is doing really well but I think in the longer term, say over the next 10 years, commercial will continue to do well because of all the earthquake compliance work that has to be done."

Way said the volume of work had led to a significant shortage of tradesmen in the Bay with "good" subcontractors in keen demand.

"I was told by a person in a group housing company the other day that every subcontractor on his site is trying to employ more people.

"In fact, I haven't seen so many stressed subcontractors in my life. Lots of guys are working well in excess of 60hours a week. Everyone is frantically running around trying to finish jobs on time before they're expected to start work on the next one."

Way said carpenters were especially in short supply with electricians and plumbers not far behind.

Despite being in such high demand, subcontractors' pay rates had remained relatively unchanged because of competition among building firms for contracts.

"You can't go bumping up your prices because there are plenty of others who will do the work for less," said Way.

Carpenters on wages were getting paid about $25 an hour while self-employed builders were receiving $45 to $50 an hour and plumbers and electricians about $60 an hour.

Jafa Construction owner Jeff Parkes said this year had been the busiest year since he started the firm 10 years ago.

"It's crazy out there," he said. "We've had to turn some jobs down a couple of weeks ago. We're booked up until April or May next year."

Parkes said he had hired four or five staff this year and was still advertising for one more but agreed there were not enough qualified builders available.

"Staff is the biggest drama at the moment, just trying to get some decent guys. We've had an ad on Trade Me for the last eight weeks trying to get guys. I've hired a few but they are just not out there, the qualified guys," he said.

Priority One chief executive Andrew Coker.

Way's confidence in the future was shared by Priority One chief executive Andrew Coker who told the Bay of Plenty Times Weekend many factors were driving the growth and it was not just cashed-up Aucklanders buying cheaper properties in the Bay or first-home buyers looking to get on the property ladder.

"While residential growth is strong we are also seeing other important sectors performing well," said Coker. "Kiwifruit has recovered from Psa, and this year's harvest was in excess of 120 million trays, well ahead of pre-Psa levels."

Coker said kiwifruit was a branded, value-based product so it was not subject to the same cyclic variations commodities like dairy products faced.

He said the professional services, manufacturing and ICT sectors were also performing strongly.

Coker said the shortage of trades people and geotech and structural engineers in the Bay was as much a national issue as a local one.

"Priority One has a number of initiatives targeting the growth and attraction of sector-based skills. Our Instep Programme builds connections between all our secondary schools and industry, to raise awareness of job and career opportunities to young people."

Coker said there were a number of projects under way or planned that would change the face of the Bay.

"The tertiary campus will be a game-changer for the sub-region while the projects proposed by the Civic Amenities Group, the civic campus, stadium, museum and hotel are exciting and will equally be game-changing."