Bay building boom boosts businesses

Noel Leeming Tauranga assistant manager Todd MacLean. The store recorded significant growth for the first quarter. Photo/George Novak

The Bay's building boom is creating a ripple effect throughout the economy as new-home construction is fuelling other businesses.

The Bay of Plenty Times informally surveyed a half-dozen local and national firms to learn how the building boom was having a positive knock-on effect in other industries.

Noel Leeming, which called itself Tauranga's largest home appliance retailer, reported that its Tauranga store recorded significant year-on-year growth in the first three months of this year. Merchandising manager Jason Bell said: "When moving into a new house, often consumers will look to upgrade or replace their whiteware or television or install heat pumps, and these categories ... have certainly shown growth well ahead of the national market."

Bell's examples for the Tauranga store included televisions (15 per cent higher growth rate than the national average), dishwashers (15 per cent higher) refrigeration (30 per cent higher) and heat pumps (more than 50 per cent higher).

Mr Bell said a significant lift in consumers buying services such as having TVs mounted on a wall was another indication of a strong housing market. He said the region's growth resulted in the decision to open another Noel Leeming store in September at Tauranga Crossing in Tauriko.

Owner of Pacifica Home and Garden Store Julie Prior said many of her clients were young couples who had moved from Auckland to build their first home in the Bay.

"This year we had a far better than expected Christmas, and usually there's a lull as the seasons change but it hasn't quite come yet.

"We're starting to reduce to winter hours, but keep getting caught short and having to call up staff saying, 'Can you come in - we're really busy'."

Mrs Prior said landscaping supplies such as hedges were popular, as were wall and garden art.

Gerrand Floorings owner Leanne Rich said her business had added staff, though the trend had been developing in the past couple of years.

"It's not an instant turn of the seesaw. It's great for the industry but there are challenges we face." Those challenges included sourcing additional employees, especially for installations, and stock, with wait times starting to grow.

"We're seeing a lift in the standard of items. People are paying more for better quality. They're making a bigger investment in their homes and not being so price-driven."

Mitre 10 marketing manager Dave Elliott said building activity had contributed to strong sales at Bay of Plenty stores.

"We're well up year-on-year and are seeing growth across both the building supplies and DIY side of the business."

John Gell has been in the kitchen industry 30 years.

He has worked the past two years at Hostess Kitchens, which provides custom kitchen design and installation from its showroom and factory in Mount Maunganui.

Mr Gell said this was the busiest he had seen his industry in 12 years.

"With some companies, it's almost double what we did a year ago. We're working 11- or 12-hour days to cope with it and constantly looking for staff ... trying to find qualified people is not that easy."

National trade association Retail NZ said overall, retailers in the Bay reported a 6.6 per cent sales increase for the last quarter of 2015, compared with the year before.

Public affairs manager Greg Harford said: "Appliance and hardware retailers are reporting that spend in the Bay of Plenty is up because of Aucklanders retiring to the Bay, good weather encouraging people to get out and about and go shopping, and a greater willingness ... to buy big-ticket items."