I thought I would do something different for this first Building Today Chief’s Chat for 2008. I think this year will be different from past ones (in quite different ways).
Here are my top eight picks for the coming year:
Strong economy, plus a stable construction industry: First, I have a hunch that the New Zealand economy will do relatively well this year, despite some international turbulence. We will see a resurgent rural economy, and the main centres will generally do well, although Auckland will be a bit flatter than usual.
Through it all, the construction industry will stay stable — new building consents will flatten down to 25,000 for the year, renovation work will stay at record highs, commercial work will stay strong and infrastructure work will expand.
Overall, builders will find the market a bit harder — they will have to work harder and smarter to get the work, but there will still be enough work around to keep good builders happy.
Politics will get messy in election year: Second, we have slowly been progressing to a US-like election process, where things get very messy, very personal and it’s not necessarily very nice to watch.
Labour will pull out all stops to get a record fourth term, and National will do everything it can to wrest power from them. For most voters, it will come down to a personality decision — Helen versus John.
I suspect the final shape of the Government will actually be determined by the minor parties — the Greens, NZ First and the Maori Party.
Our industry will get caught up in the political fighting, particularly on issues such as housing affordability, compliance costs and sustainability.
Skills-related issues will remain the number one priority for builders: We now employ more people in the construction industry than ever before and we have more people in training/apprenticeships than ever before, but builders still have skills gaps in their businesses, particularly in the area of the 35 to 45 skilled and experienced tradespeople and foremen.
Builders will have to get sharper and smarter in how they hire, train and retain staff.
Quality issues will be a close second priority issue: There will be an increasing focus on quality issues across the sector. We have implemented the first “post leaky building” wave of quality changes — mostly “construction-related” changes.
Now that the industry has got used to these, I think builders will start looking at their internal business quality systems and processes and lift their game around these, particularly in the areas of quality control (which is, in part, related to the skills issue above) and technology, ie, using technology to help systematise best practice.
We will finally get serious on compliance issues!: Builders have put up with increasing levels of compliance for some three years now, post the leaky building reforms implemented in 2004.
Even though we have been telling the Government for the past two years that we’re nearly at crisis point, this year will be the year in which the politicians will finally get it, and we have the housing affordability issue to thank for that.
We’ll start to see some concerted thinking and action around this issue in the next 12 months. For certain, the construction industry cannot continue with the creaky, disparate, nonsensical levels of compliance we face today — and, unfortunately, it’s going to get worse before it gets better, as councils go through their accreditation processes.
It’s also clear that councils want to get this sorted themselves, and so we look forward to working with them, the Department of Building and Housing and the full range of industry stakeholders and colleagues to see how we can work together to get this fix started.
Green building issues will continue to grow in momentum: After a slow start of around 10 years ago, green building issues are here to stay, and the momentum around them will get deeper and faster. Builders will have to get their heads around what they can and need to do to keep up with this “second green wave”.
Licensing will start to gain momentum: While we (Registered Master Builders) have adopted a neutral approach around the implementation of Building Practitioner Licensing, given some of the wrinkles we think still exist within the scheme, I still suspect we will see growing industry support for licensing over time.
For too long we have had cowboys in our industry who buy a box of tools and a van and call themselves builders.
They undercut quality and profitability within our industry, and licensing will still be the best way to ensure a minimum benchmark for people to attain.
So, the start of 2008 will see a small number of licence holders getting through the system and that will steadily increase by year end.
Industry leadership will remain critical: Throughout all the above issues, it will be absolutely essential that the industry leads the way. We need to continue “stepping up to the plate” to push the industry view so that we can get the outcomes we know will be right for our industry, for the public and for New Zealand as a whole.
Leadership requires courage from time to time, and Registered Master Builders will certainly be rising to that challenge this coming year.
We look forward to working with the broad spectrum of stakeholders across our industry to deliver on these outcomes.
And, of course, the beauty of trying to crystal ball gaze into the future is that you risk being entirely wrong with most or all of the picks you have made!
As I heard from someone a few months ago — and please excuse the semi-sexist analogy (because it’s not normally how I work nor think) — we need to have two types of balls: a crystal ball so that we can see into the future with as much clarity as we can possibly muster; and a steel ball so that we can continue pushing through on the hard decisions we know we need to make.
Have a good 2008 year, everyone — and perhaps I can look back in my December’s Chief Chat to see how well my predictions have worked out!