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Carl Taylor: Combined Building Supplies CEO says most builders feeling fuel price increases · Best of Business

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  Speaker 1: You're listening to a podcast from Newstalk zed B. Follow
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  Speaker 2: And now the Impact of the War. Our builders are
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  Speaker 2: warning the fuel costs are now hitting breaking point. A
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  Speaker 2: new survey shows at eighty four percent of felt moderate
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  Speaker 2: to significant impact in just the last thirty days. Travel
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  Speaker 2: costs are up eighty six percent, freight up forty nine percent,
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  Speaker 2: Supplies and materials also rising forty eight percent. Sixty percent
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  Speaker 2: of builders are still absorbing that cost but it's coming
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  Speaker 2: towards your pocket very soon. Fixed priced jobs are now
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  Speaker 2: starting to push some companies under. Carl Taylor is the
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  Speaker 2: CEO of the Combined Building Supplies COP and he's with
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  Speaker 2: the SNAW. Good boarding to your.
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  Speaker 3: Carl, Good morning, Andrew.
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  Speaker 2: Are you calling this a breaking point? How close is
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  Speaker 2: that point?
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  Speaker 3: Look? Yeah, we've got a lot of builders that are
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  Speaker 3: generally concerned with their business, and you touched on those
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  Speaker 3: numbers that we put out with our recent survey, and
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  Speaker 3: so obviously you know, sixty seven percent off those members
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  Speaker 3: of ours are absorbing those costs. But you know, I'm
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  Speaker 3: hearing story from some of our members that can't even
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  Speaker 3: afford to get to cite at the moment, which is
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  Speaker 3: awfully concerning, particularly you know, when we're trying to create
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  Speaker 3: as an industry affordable housing and it's getting to that
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  Speaker 3: point where that's becoming quite hard to do.
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  Speaker 2: Tell me about the builders who have, of course quoted
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  Speaker 2: for a job before this crisis struck, and now they're
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  Speaker 2: stuck into a fixed price contract and now, of course
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  Speaker 2: the costs are going I mean, how much money are
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  Speaker 2: they losing.
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  Speaker 3: Sook in some cases obviously there are fuel prices particularly
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  Speaker 3: these will have doubled. So you know, prior to this
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  Speaker 3: that they'll go out quote a job, fixed price contract.
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  Speaker 3: They might have signed that contract now and obviously they're
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  Speaker 3: trying to absorb that. They're having to absorb those costs,
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  Speaker 3: which which again is causing issues with profitability with their business.
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  Speaker 3: At the moment. Most of them are absorbing those costs,
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  Speaker 3: but it's at a point now where they're either having
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  Speaker 3: to carry it themselves because there's no clauses in their
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  Speaker 3: contracts to be able to pass on those costs. And
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  Speaker 3: that's probably where the concern is for the industry at
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  Speaker 3: the moment.
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  Speaker 2: And people are starting to hesitate or delay their projects
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  Speaker 2: and builders might not take things on because of these
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  Speaker 2: decreased margins. The question is what can we do? Is
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  Speaker 2: there anything we can do or just pray for an
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  Speaker 2: end to the hostilities.
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  Speaker 3: Unfortunately, it's one of those things you've got to try
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  Speaker 3: and crystal ball it. But what we see in the market,
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  Speaker 3: particularly coming out of COVID the economy where the construction
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  Speaker 3: economy was starting to really get back on its feet.
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  Speaker 3: But what you start to see is hesitation. So clients
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  Speaker 3: are obviously starting to look at porson their projects. Pricing
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  Speaker 3: becomes harder to lock in and the confidence drops, and
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  Speaker 3: that's when the activity flows. The only thing I would say,
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  Speaker 3: you know, today is the cheapest time to build because
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  Speaker 3: we don't know what's going to happen tomorrow. But the
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  Speaker 3: long term effect of that is at the moment, the
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  Speaker 3: prices are going up and inevitably that's going to have
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  Speaker 3: to be passed on to the homeowner at some point.
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  Speaker 2: Kyle Taylor, I thank you for your time.
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