Battling the slowdown: Builders catch breath after mad 12 months

Foster Construction general manager Colin Wade is starting to feel the slowdown in the building industry.

Competition between builders to secure work was rising, as the mad building boom of the past year slowed, he said.

The industry contracted 6.5 per cent in the June quarter, driven by a 10 per cent drop in residential building, according to yesterday's GDP data.

Wade said commercial building had been "flat out" over the past 12 months but demand was easing.

"It was mad for about a year," he said. "Everybody's taking a bit of a breath and the work is getting a bit more competitive."

The Hamilton-based company employs around 100 people and works mainly on commercial construction, such as shops and factories, in Auckland, the Coromandel Peninsula and Waikato.

Its workers were still busy, said Wade, but fewer projects were on the horizon.

"Auckland's slowed down a little bit now and I think when Auckland slows down, we all gradually slow down."

Despite the somewhat gloomy outlook from Wade, building consent figures released yesterday by Statistics NZ showed there was still strength in the housing market. Residential building consents rose for the second consecutive month on a seasonally adjusted basis in August, up 3.6 per cent on July.

"Dwelling consents continue to be resilient, in part supported by a recovery trend in net migration since late 2005," said Goldman Sachs JBWere economist Shamubeel Eaqub. But Registered Master Builders Federation chief executive Pieter Burghout has noticed a slowdown.

"A year ago if you'd asked [builders], they would have had a year to two years of work ahead of them," said Burghout.

"There's not as much as there was a year or two ago."