Latest / Best of Business / Malcolm Fleming: NZ Certified Builders CEO on the rise in construction business liquidations

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Malcolm Fleming: NZ Certified Builders CEO on the rise in construction business liquidations · Best of Business

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  Speaker 2: It's a bit of a hammer blow for the construction industry.
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  Speaker 2: The year is not off to a great start. More
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  Speaker 2: than twenty building and property related businesses have gone bust
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  Speaker 2: in just a seven day stretch. Malcolm Fleming is the
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  Speaker 2: chief executive of Certified Builders and is with us now
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  Speaker 2: Evening Malcolm, Good.
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  Speaker 3: Evening, Heather, Thanks for having me on Jella.
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  Speaker 1: Thanks for joining us.
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  Speaker 2: Twenty two and seven days? Does seem like a lot?
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  Speaker 1: Is it?
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  Speaker 3: As much as it seems, It doesn't feel like that.
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  Speaker 3: If I think about these on Certified Billbers, we have
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  Speaker 3: twenty three hundred members. Typically in a year we see
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  Speaker 3: about six liquidations across the year. Last year was twenty one,
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  Speaker 3: and that really is an indication of how challenging the
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  Speaker 3: last two years have been for the industry. So far
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  Speaker 3: this year we've seen the one are there members going
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  Speaker 3: to liquidation? And any liquidation, Heather, is a bad news story.
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  Speaker 3: It's devastating for the builder, the homeowner, the sub trades
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  Speaker 3: and supply and obviously you'd like to see very few
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  Speaker 3: of those numbers.
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  Speaker 2: If any at all, do you think, I mean, obviously
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  Speaker 2: we've been through the tough patch. Do you think if
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  Speaker 2: they're still sticking around right now times are getting better
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  Speaker 2: or is it still a bit of a grind.
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  Speaker 3: Like that We're still seeing liquidations through into what really
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  Speaker 3: feels like the start of an economic recovery. That was
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  Speaker 3: still seeing them is not unusual. There'll be building firms
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  Speaker 3: have taken on low margin projects or projects that they
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  Speaker 3: really just shouldn't have taken on just to get through,
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  Speaker 3: to keep their staff, to keep the wheels moving, and
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  Speaker 3: some of them to stay in business over this very
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  Speaker 3: terrible time. This the last two years, we've taken on
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  Speaker 3: debt levels to stay afloat and the belief that things
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  Speaker 3: would turn around. And certainly this isn't an indictment that
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  Speaker 3: went on diament an example that they're still flowing on through.
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  Speaker 3: They haven't been on the hang on long enough for
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  Speaker 3: the recovery that really is starting to feel as underway.
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  Speaker 2: Now, when do you reckon we're going to start spending
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  Speaker 2: on building?
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  Speaker 3: Well, I'm starting to see that builders are starting to
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  Speaker 3: get themselves thinking about growth. And there's a couple of
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  Speaker 3: points of data can point to last week's seep darket data,
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  Speaker 3: for example, talked about a large spike in construction jobs
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  Speaker 3: being advertised. But if I look close to the Home
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  Speaker 3: and Certified Builder's own data across the month of January,
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  Speaker 3: we're up fifty percent on our members downloading employment contracts,
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  Speaker 3: which is one of the membership befods, and that's indicating well,
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  Speaker 3: good proxy that that's it's going to feel comfortable about
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  Speaker 3: expanding their business because they have a work pipeline of
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  Speaker 3: work starting to build up.
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  Speaker 2: Malcolm, it's good to talk to you. Thank you for
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  Speaker 2: running us through at Malcolm Flemming and some good news
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  Speaker 2: their Certified Builder's Chief executive.
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