Fletcher Building’s $120 million net loss and what it means for the wider construction sector - The Front Page

The question of how other construction outfits will stay afloat is hanging over the sector. Photo / Supplied

Horror half-year results have exposed major issues for Fletcher Building and sent shock waves throughout the construction sector.

With the country’s largest building company struggling, the question of how other construction outfits will stay afloat is hanging over the sector.

Property editor Anne Gibson told The Front Page, the Herald’s daily news podcast, many construction businesses continue to make losses and there are liquidations of smaller businesses “every day”.

“A lot of the failures in the building sector are still being blamed on Covid.”

Gibson said Fletcher Building’s chief executive Ross Taylor had also pointed to the impacts on the business of Covid, as well as the fire at the International Convention Centre and subcontractors going under.

“The jobs that had been tendered so long ago, some firms had failed and he had to find new firms to do the sub-trade work that’s needed to finish that building.”

In the previous corresponding period, Gibson said Fletchers had made a profit of $92 million, so the loss announced this week was a big turnaround.

She told the podcast that building was a fluctuating sector, and the challenge for it was working out how to smooth out the “bumps and the lumps” to be more stable.

“Not to lose people, not to lose apprentices, not to have people going to Australia and to try and get a more smooth cycle occurring.”

Gibson said the huge drop in consents was having a large impact on the development sector and was due to rising interest rates and less confidence in the economy.

Listen to the full episode to hear more from Herald property editor Anne Gibson on the issues facing Aotearoa’s construction industry.

The Front Page is a daily news podcast from the New Zealand Herald, available to listen to every weekday from 5am. This episode was presented by Katie Harris, an Auckland-based journalist with a background in social issues reporting who joined the Herald in 2020.

You can follow the podcast at iHeartRadio, Apple Podcasts, Spotify, or wherever you get your podcasts.