Downturn hammers struggling builders | Wairarapa News | Local News in Wairarapa

Builders are losing their jobs and firms are slashing tender prices in a race to the bottom that is killing Wairarapa building's industry.

The number of Masterton building consents has dropped by 20 per cent since the onset of the economic downturn and the rest of Wairarapa is faring little better.

A Wairarapa builder who did not want his name published, has let three staff go and halved his working week since the start of the year.

Asked what the market was like, he was blunt: "It's just really bad. What I'm finding is no one is committed to any work, no one has any confidence in anything."

At the start of the year his books were packed but clients began cancelling and now he is left primarily with maintenance work.

A price war is under way among firms, who are hacking profit margins to undercut each others' tenders.

The builder said his firm once offered some of the cheapest tenders in the district but he discovered in May his tender price was the most expensive for a particular project by $6000.

He said there was a degree of irony in all the cost-cutting.

"People are getting a great deal at the moment, but those that can afford building don't, because they don't have any confidence."

Builders are hoping the summer will bring fresh demand for decks and renovations but he does not expect the underlying situation to improve until the retail sector and property market pick up.

"Among the builders, we say we are a year behind Wellington coming into the recession and we will be a year behind coming out."

John Hymers, director of D R Borman, a 22-strong firm and one of Wairarapa's largest builders, said work was erratic but they were holding on.

"It's quite tight and I guess we don't have the same continuity of work coming through," he said.

The company put off three staff at the start of the year but as long as they could maintain a flow of work Mr Hymers does not expect any more jobs will be lost.

He said small builders were being hit harder than the bigger firms, but unseen casualties were apprentices. Most small firms could not afford to keep them on.

Conor Kershaw, manager of Mitre 10 Martinborough, said they had a handful of builders who owed the store money and who did not know where their next pay cheque was coming from.

He felt sympathy for the builders, many of them being long-time customers, and had not needed to call in debt collectors.

"One of the big things for us is that we are in a small town and live alongside our customers, and there is that small town respect."

There has been a huge drop in demand for building supplies, which does not surprise Mr Kershaw given there were only three new building consents approved in South Wairarapa last month.

The store was handling the downturn, but he said they had not replaced a staff member who left.

Griff Page, vice-chairman of Wairarapa Chamber of Commerce, did not feel he could speak with authority on the regional building sector but said there was light at the end of the tunnel. "I guess the whole economy needs to get more motivated and obviously the Government has that in mind."