Building Business August 2021 by ITM Support Office

THE LATEST NEWS FROM YOUR BUILDING SUPPLIES SPECIALIST

Apprentice sign-ups skyrocket. But is it enough?

Is your extra stock covered by your insurance?

Highlights

New season of ITM Fishing launches 06

UNO KITCHENS EXCLUSIVE TO ITM See inside for our latest brochure.

ISSUE 98

Product substitution: mitigate your risk 18

Photo Credit: Aly Gonzáles-Dudley.

A 20 UG 21

How to calculate your charge-out rate 21

APPRENTICES

KITCHENS

03-04

Apprentice sign-ups skyrocket

Kitchen Feature Lining by Genia

POWER TOOLS

PRODUCT KNOWLEDGE

18-19

Hot Makita deals

Product substitution: Simple rules to mitigate risk

ITM FISHING

BUSINESS ADVICE

06-07

21-22

New series of ITM Fishing starts August 8th

How to calculate your charge-out rate

INSURANCE

HAND TOOLS

Is your extra stock covered by your insurance?

Hot deals on hand tools

CODEWORDS

SUSTAINABILITY

The history of LBP part 2 and quiz

Prioritising GIB® Plasterboard waste minimisation and recycling

10-11

CODEWORDS

INDUSTRY ASSOCIATION

Learnings from Board complaints and quiz

12-13

New Zealand Certified Builders (NZCB) annual conference and expo

INDUSTRY NEWS

Buildit. The new tool to help homeowners navigate building consent exemptions

EMPLOYMENT

Minimum sick leave entitlement increased to 10 days

SUSTAINABILITY

Sustainable disposal solution for waste tyres a New Zealand first

MOTORSPORT

Green light for ITM Auckland SuperSprint at Pukekohe

28-29

KITCHENS

UNO Kitchens, exclusive to ITM

Pull out

PRODUCT KNOWLEDGE

New Kaikohe wharehui features glulam portals

GIVEAWAY

ITM REVERSIBLE VEST

! EE R F

Spend over $450 ex GST on products advertised in this issue and receive a free ITM reversible vest* *The $450 spend must be on one product/brand and be on one invoice. Qualifying products are: Makita (pg 5), Expol SLABX200 (pg 8), Dynex Pallisade (pg 20), Triboard TGV (pg 24).

Building Business contributes towards your LBP skills maintenance requirement. Ensure you log this into your ITM diary or the ITM App today. All prices exclude GST. Prices are valid August 2nd – September 12th 2021, unless specified otherwise. Building Business is a bi-monthly magazine produced by ITM Support Office. For feedback or address updates contact: ITM Support Office, PO Box 101556, North Shore, Auckland. Email: buildingbusiness@itm.co.nz Ph: 09 415 2787

ISSUE 98: AUGUST 2021

In this issue

Carpentry apprentice sign-ups have soared by around 175% in the first five months of this year, and the number of employers taking on apprentices has soared as well. The trend is similar for sparkies and plumbers. That’s the good news. The not so good news is that it won’t be nearly enough to cope with the huge and growing wall of construction work in the next few years. Latest estimates show there are around 232,000 workers currently employed in the construction sector in New Zealand, but we need an “additional 66,000 workers for the projects we know of in the project pipeline now,” says BCITO chief executive Toby Beaglehole. “It’s going to be challenging. People seem to be saying 'unprecedented' a lot but, for us at BCITO, there is no other word. It’s the perfect storm of huge, urgent and growing demand with virtually zero immigration of skilled workers to fill the gaps.”

Spectacular results The results of training incentives for the construction industry launched last year have been nothing short of spectacular. The Apprenticeship Boost scheme, coupled with fees-free training, has seen apprenticeship sign-ups reach all-time records. Of all the trades, carpentry was the most popular with nearly 2,000 sign-ups from January to May this year. “We’re seeing increases right across the board,” says Beaglehole, “with around 70% of the sign-ups being CONTINUE >>

03 APPRENTICES

Apprentice sign-ups skyrocket. But is it enough? And will it end too soon?

04 APPRENTICES

wage and salary earners making a career change. The numbers for school leavers, university graduates and self-employed are also much higher. “The really big change versus last year is that we’ve seen almost twice as many new employers who have never trained apprentices before come into the sector. That’s fantastic.” Historically, only 10% of employers take on apprentices, but that number has nudged up to 13.5%, a huge step towards ramping up the number of new people coming into the construction industry.

Building wage pressure While constrained by shortages of skilled labour and material supply problems, the NZ residential building industry is running at full capacity. Consents have hit the highest number since the 1970s, and there’s been a surge in renovation work due to the redistribution of the millions of dollars that Kiwis would have spent on overseas travel.

growing the numbers we need.” The electrical industry has similar problems, according to Master Electricians CEO Bernie McLaughlin. “The average age of a plumber is 50 plus. We have a lot of people retiring and are going to lose 15 to 20% of our workforce over the next 15 years. We’re training just to keep up. We have to grow apprentice numbers by 23% a year to keep the industry at a stagnant state. “If you’re looking at building a house right now, you’re looking at a 2-to-3-year delay before you can get a full complement of trades to complete a build. Logistics are breaking down. The flow-on effect is huge.”

According to CoreLogic chief property economist Kelvin Davidson, demand pressures are “unlikely to let up soon. Listings of existing properties remained tight, which was pushing people towards building new homes or renovating their current ones. “The Government’s recent tax policy changes which incentivise investors to target new-build properties could well add further demand to the sector and place more pressure on capacity and costs.” Beaglehole says the whole industry is acutely aware of the building pressure on wages and costs. “We’ve heard from employers that they’re having to pay more for apprentices than ever before. That’s great because it’s going to attract more people into the sector, but not so good for the employers. “In terms of certainty, the demand is there. The career path is there. But there is far higher demand from employers than there are apprentices signing up, so that’s going to continue to put pressure on wage rates.” Master Plumbers chief executive Greg Wallace agrees: “The shortage is so desperate, we’re seeing poaching and wage rates move significantly. Builders can’t find subbies.”

Building delays While the huge increase in apprenticeship training is a positive trend, it’s no silver bullet. One of the biggest issues facing the industry is an ageing workforce. “We had some growth due to fees free and the Boost scheme,” says Wallace, “but we’re still not

A policy that’s working There is universal agreement that the Apprentice Boost programme has been successful, and widespread hope that the scheme will be extended. “We are expecting to see a drop off in apprentice sign-ups at the end of this year, in anticipation of the scheme ending,” says McLaughlin. “We were expecting something in the budget about getting the scheme extended. We need certainty. We can prove that the scheme’s working.” Beaglehole concurs: “The Boost scheme is a fantastic initiative. For the benefit of NZ inc, it’s delivering the results it was intended too. And the very fact that there’s this pipeline of work and infrastructure growth just sitting there, means we need to attract more people. It’s a no-brainer.”

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ITM FISHING

The Kiwiest of Kiwi shows Series 18 of ITM Fishing starts August 8th, and it’s the first series to be filmed entirely in New Zealand. Most years, we embark on an international adventure or two, usually involving an exotic location, or hunt for a super-cool fish not found in New Zealand waters. But we all know what Covid has done to international travel and, honestly, a part of me was relieved to have the international travel wiped from my schedule. I saw this as an opportunity to seek out some of the more ambitious fishing challenges in New Zealand, like spearing a swordfish in the South Island, and getting back to grass roots, like fishing in the Hauraki Gulf with some newbies and showing them there’s plenty of good snapper and kingfish to be caught there still.

Catch them to eat them As with every series, we like to mix it up with different locations, boats, anglers, techniques and challenges. But looking back over the series, there is a common thread – catching a feed and utilising the catch. With the exception of a couple of wild swordfish encounters, every episode sees us target fish that are good to eat. We demonstrate how to catch them, including some techniques I’ve only just learned myself, and sometimes we show you how to prepare them and use the whole fish. Respecting

the fish we catch and conservation of the resource has always been important to me, but more so now I’m getting a bit older, and there is no better way to conserve and show respect than by ensuring the whole fish gets eaten. Eat more of the fish, so we take less of them.

Adventure and a feed In a couple of the episodes, the main theme is mixing up some adventure with catching a feed. The adventure comes from fishing in new areas, and we look to show how accessible it is by fishing in my little 1450 Stabicraft and doing it on a single 25L tote-tank of petrol. I encountered everything from dozens of marlin feeding, to packs of surface feeding kingfish, and caught a variety of fish to take home. So, do I miss not travelling overseas? Nope, not one little bit. On the following page is a sample of the first few episodes screening on Three. If you want to stay up with the very latest videos and more, follow ITM Fishing on Facebook, and follow me (Matt Watson) on Facebook and Instagram. Till next time. Keep ‘em tight.

marlin action, before they turn the boat back toward the coast to fish, dive and explore closer to shore.

ITM FISHING

Coming up in August

Watch every Sunday, 5.30 pm on Three. Catch up on ThreeNow. Episode 1. The Fight Club A trio of boxers from Auckland, including brothers Joseph and John Parker visit Matt in the hopes of taking some fish home. They came to the right guy to get fish, but after going 12 rounds with some big kingfish, you can hear cries of “no more, please no more!” So they mix it up catching a variety of quality eating fish, and a dive has them leaving with enough fresh seafood to feed them all.

First drop in 500 metres, a double header of Bluenose.

Episode 4. Trailer Boat Expedition – Part 3

Matt and Joe pose with the first of many kingfish, that got bigger and bigger!

Matt and his mate Ben, along with the pivotal team member ‘Camera-Man-Dan’, have spent two nights eating, sleeping and fishing, all in the confines of 8.3 metres of trailer boat. But they’ve hardly been roughing it, with hot meals and live sport to fill in the time between some crazy fishing action. Matt gets a break from the boat (and Ben and Dan get a break from Matt!), when he jumps in the water and grabs some paua and crayfish to be cooked fresh on board. And the fishing continues, from right in the shallows, to out deeper where an automatic jigging rod is set up to help prospect in new ground.

Episode 2. Trailer Boat Expedition – Part 1 Matt sets out in his new 2750 Stabicraft on a threeday expedition on the West Coast, where fishing is on the agenda 24/7. There is enough fishing tackle on board to target everything from squid and snapper, to marlin and swordfish, and the dive gear allows Matt to explore and hunt underwater too. With the forecast good, the first location is an offshore seamount, but the journey is interrupted by marlin.

Episode 3. Trailer Boat Expedition – Part 2 After an eventful night at a seamount, with not a lot of sleep, Matt and his mate Ben rig up to fish the bottom, deeper than they have ever fished before. Baits and jigs get dropped over 500 metres and everything works! Moving between spots, lures are set out, and the two-man crew have some frantic

“It’s coming after us!!” – a swordfish comes in to attack the boat.

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On a recent road trip catching up with builders around the lower North Island, pretty much everyone raised the issue of supply of materials. This included merchants out of stock, much longer lead times on ordering materials and cost increases across the board. Some of you may be tempted, as a number of our clients are already, to build up your own stock levels. That way, if merchants run out, at least you have some on hand and you can get by. The value of this stock on hand can soon mount up, so you need to make sure it is covered by your insurance. Building materials are exposed to the usual risks of water damage, fire, etc. And because they are in short supply, with prices rising every other week, they are an increasingly attractive target for thieves too. If these materials are allocated to a specific project, then they can be covered by contract works insurance under the 'offsite storage' extension. This has a sub-limit and is only for stuff for that job. If you’ve bought materials that are not for a particular job, then your best bet is to make sure it is covered under a material damage policy. You may already have one that covers your tools and equipment, and stock can generally be added under this too. This is likely to be an 'anywhere in New Zealand' policy, so the stock is insured if stored at your yard, in your garage, in your vehicle (although this could be restricted in some cases) or on site. Be sure to increase your 'sum insured' by the value of the stock you’re carrying. If you own premises (e.g. a building or yard), the insurance on that building could be changed to include stock as well. Check the stock sum insured on your current cover and make sure you increase it if needed. Depending on the wording of your policy,

the stock may only be insured at a specific address. If it might be transported or stored elsewhere, you will need to notify your insurer.

Asset register reminder In February, a customer of ours had their vehicle broken in to and tools stolen. Unfortunately, they did not have proof of ownership for some of the larger items, and this delayed settlement of the claim. We fought hard on our customer’s behalf and when he managed to dig up some pictures of the items, the claim was then settled quickly. This is a timely reminder that proof of ownership will help get your claim settled swiftly. This could be an asset register such as a spreadsheet or app that holds details of your tools; receipts and invoices or photos. Ideally, you would record each item’s details, serial number, date purchased and value. The same goes for any stock that you’re building up.

by Ben Rickard Builtin Insurance Advisor

Builtin are New Zealand’s Trade Insurance Experts. For more information, visit builtininsurance.co.nz, email Ben Rickard at ben@builtin.co.nz or call him on 0800 BUILTIN.

INSURANCE

Is your extra stock covered by your insurance?

CODEWORDS

Part 2: The history of LBP – major failures began to appear In the second article in the series on the history of the Licensed Building Practitioners Scheme, we look at the issues that caused leaky buildings. Starting in the late 1990s and continuing for the next several years, the building industry was in turmoil trying to figure out what was going wrong. The regulator of the day, the Building Industry Authority (BIA) commissioned a report – more about this later – and the Government Administration Select Committee published Weathertightness of buildings in New Zealand in 2003, mainly in response to a recommendation in the BIA commissioned report. One of the first signs of the seriousness of the problem was that the BIA excluded face-sealed cladding systems in high-risk areas from the Approved Document E2/AS1 External Moisture. A new name appeared in the NZ vocabulary, and it quickly became a dirty and loaded phrase…

Leaky buildings Leaky building syndrome was a problem where moisture was getting into the wall framing of our houses, and then seeping further. Unlike a roof leaking due to damage or age, this was about water getting in through the wall claddings – mainly, but not limited to, at penetrations through the cladding. Insufficient clearances below the claddings, and

the difference in height between the finished levels outside, in relation to the floor level inside, were other critical weathertightness areas. With the widespread practice of using sheet material claddings to give a monolithic look, there was not enough care around the flashing systems – for example, at the top corners of the exterior joinery. Level entry areas into houses were also a problem.

Who was to blame? A subsequent report called the problem a 'systemic failure', meaning that it wasn’t just one section of the industry or a particular product that was at fault – it appeared as though a large part of our thinking hadn’t caught up with the new freedoms that the Building Act 1991 had given us. House design was tending to be somewhat faux – for example, a client might want their house to look like something from the Mediterranean. The problem then was that, to keep costs down and make other factors such as insulation possible, the design called for timber framing and a plaster finish – often on a rigid sheet substrate. This is the faux design referred to – making a light timber framed

• A lack of essential detailing and installation practices at critical joints and junctions • installers not keeping up with installation instructions from manufacturers, the classic example being the changing of nailing patterns for the fixing of bracing sheets, or how a new product needs to be installed • critical flashings being omitted for aesthetic reasons – a window head flashing for instance, which would compromise the monolithic look • materials and products being accepted as fitfor-purpose when they hadn’t been tested for that situation, for example the paint coating on a rigid sheet cladding material that required face sealing to make it weathertight • councils approving a product shown on the site documents when, in fact, it may not have been approved for use in this situation • the use of new materials – a prime example would be the 1996 decision to allow untreated pine to be used for the structural framework of a house. Untreated pine was not a direct cause of water entering a house, but it did create a very significant structural problem once the moisture got to it. The cost of repair of a leaky building was, and still is, greatly increased where this timber – marketed as chemical-free – was used. Remember the collapsed cantilevered deck from the previous article? It turned out the joists were untreated! Building inspections were still being carried out as they had been for years. The new Building Code didn’t bring a more thorough regime for inspectors to follow in checking areas critical to the structural and weathertightness integrity of the building. The BIA commissioned a report into what happened and why, and in the second half of 2002, the Report of the Overview Group on the Weathertightness of DESIGN EXTERNAL Buildings, better known as the Hunn Report – the PLASTERING name of the chairman of the Overview Group – was released.

D S

This is when we knew we had a real problem… SITE

BRICK & BLOCK LAYING

Look out for the October issue of Building Business or visit www.lbp.govt.nz/for-lbps/ codewords for the continuation of this FOUNDATIONS series. CARPENTRY

This article is relevant to these classes: ROOFING

ALL

Codewords Quiz 1. What is the definition of a leaky building? a) A problem where moisture is getting into the wall framing and then seeping even further. b) A leak caused by rusting or damaged roofing c) A leaking pipe in the wall behind the shower d) A house that won’t keep floodwater out 2. What were some of the causes of the leaking problems? a) Lack of essential detailing at critical joints and junctions b) Flashings being omitted c) Not following manufacturer’s installation instructions d) Inspections not sufficiently thorough for modern building practices e) All of the above plus others, as it was a full systemic failure 3. Why was untreated timber framing a problem? a) It caused the leaks through the claddings b) Major structural repairs were necessary once the moisture got to it c) It cost too much d) It wasn’t strong enough to support the roof

Answers: 1.a 2.e 3.b

The issues identified included:

ADD TO LBP ACTIVITY LOG

This article is from Codewords Issue 101. Use the ITM App to log your activity today.

CODEWORDS

building look like a solid, monolithic structure and the inherent weatherproofing design issues that come with that.

Learnings from Board complaints

CODEWORDS

Annually, around 1% of Licenced Building Practitioners will have a complaint made against them. Anyone can make a complaint about an LBP to the Building Practitioner Board, who then investigate and determine the seriousness of the complaint and decide on any penalties following a hearing. Making a valid complaint

Lack of supervision

A complaint can relate to building work (including design work) or poor behaviour related to building work. The Board cannot hear complaints regarding payment disputes, or commercial or contractual disputes including employment disputes.

An LBP is needed for the design, supervision or the physical carrying out of any restricted building work. For design work, this could be undertaking a thorough check of the drawings and documents once they have been completed by a non-licensed person. But on-site, it means that the work must be closely supervised while it is being carried out to the extent that the LBP who is completing the record of work (ROW) is satisfied that the work has been completed, as per the plans and to a good level of workmanship.

To be able to make a complaint about an LBP, you need to ensure that: 1. The person you are complaining about was an LBP when the conduct occurred. 2. The conduct you are complaining about is covered by one or more of the ‘grounds for discipline’ listed in section 317 of the Building Act 2004. 3. You can provide sufficient evidence to support your complaint. 4. Your complaint is made on the approved form.

Common complaints There are a number of grounds for discipline, but the majority of complaints are in relation to a lack of supervision, poor workmanship, not building to the plans or bringing the LBP scheme into disrepute.

This can be difficult if you, as the LBP, are not on-site when the work is being carried out – best practice is being ‘proximate’ to the work. Of course, if you know the skill level of the person doing the work and have seen them carry out similar work in the past, then the supervision can be a bit less constant. However, remember – if the work fails sometime in the future, your name is on the ROW. Why would you want to jeopardise your licence because someone else did not do their job properly? To provide guidance on supervision, there is a Registrar's practice note document. Go to www.lbp.govt.nz and search for 'practice note - supervision' to view the pdf.

13 Poor workmanship

Not following plans Not following the plans or using the BCA as quality assurance (“You tell me what’s wrong, and I’ll make sure I fix it for you…”) is becoming more prevalent, and the penalties handed out to respondents who have been found guilty of doing so, reflects the Board’s stance on this type of complaint.

Codewords Quiz 1. How do you make a complaint made against an LBP? a) Talk to your local Building Inspector b) Phone your lawyer c) Use the approved form available at lbp. govt.nz 2. Why could someone make a complaint against an LBP? a) Inadequate supervision resulting in mistakes being missed b) Poor workmanship c) Not following the plans d) All of the above 3. When must a record of work be issued?

Bringing LBP scheme into disrepute Bringing the LBP scheme into disrepute stems mainly from communication issues – not answering calls from clients who may have an issue with something you have or have not done, arguing with the client, or not complying with a lawful request from the Board are among the cases that we are seeing.

a) Following completion of the RBW b) When you’ve been paid c) When someone asks for it d) At the end of the financial year

Failing to provide a ROW

SITE

BRICK & BLOCK LAYING

Look out for the October issue of Building Business or visit www.lbp.govt.nz/for-lbps/ codewords for the continuation of this series.

CARPENTRY

This article is relevant to these classes:

FOUNDATIONS

R ROOFING

ALL

Answers: 1.c 2.d 3.a

And last, but not least, is failing to provide a ROW. The main excuse for not providing the ROW seems to be trying to use it as a lever to ensure the final payment is made. The ROW should always be completed and given to your client and the BCA as soon as possible after the restricted building work has been completed. The average fine handed down for this offence is $1500, along with $500 DESIGN EXTERNAL PLASTERING towards costs – is it really worth $2000 to not provide it?

ADD TO LBP ACTIVITY LOG

This article is from Codewords Issue 101. Use the ITM App to log your activity today.

CODEWORDS

Poor workmanship is not something any LBP ever wants to be accused of. We should be proud to put our name to our work, which is one of the main principles of the scheme – you have been assessed as being competent at your trade or profession. Workmanship is a hard thing to define – I would ask myself that if someone else had carried out work to that level of workmanship on my own house, would I be happy to accept and pay for it? Go to www.building.govt.nz and search for 'guide to tolerances' to view the Guide to tolerances, materials and workmanship in new residential construction document.

Resources at your fingertips.

Experience our interactive 3D installation models at jameshardie.co.nz/resources.

Since the new suite of building consent exemptions launched back in August 2020, the Building Performance Team have been busy creating an online education tool for homeowners called Buildit. 2. Answer the questions

Making sure all questions are answered about the project. 3. Read through the next steps

Buildit allows homeowners to answer a few questions about an upcoming project and see if it needs a building consent, or if it could qualify as exempt building work. The tool has been launched with the most common homeowner-focused exemptions and there is a plan to further develop the tool and add more of the exemptions over time.

Based on the answers submitted, the Buildit tool will determine whether the project needs a building consent, or if it may be exempt, and will provide a set of next steps to read through. These could include: • Any additional rules and restrictions for the project. • Links to the full project guidance on MBIE’s Building Performance website. • How to comply with the Building Code. • How to contact the local council to ensure your work complies with the District Plan. • Useful rules and legislation to read through. • Professionals to contact for any further guidance.

How Buildit works To use the Buildit tool, the homeowner just needs to follow these three easy steps: 1. Find their project

Type in a project and choose the closest match.

Why not familiarise yourself with this handy educational resource – or even test your knowledge of building consent exemptions? At some stage in the future, it may be useful to recommend Buildit to your homeowner clients. Simply visit www.buildit.govt.nz

INDUSTRY NEWS

New tool to help homeowners navigate building consent exemptions

16 SUSTAINABILITY

Sustainable disposal solution for waste tyres a New Zealand first The recently completed tyre project at Golden Bay Cement, will divert up to three million used tyres going to landfill each year.

The significant upgrade to New Zealand’s only endto-end cement plant, which is based in Portland, Whangarei, was officially opened by the Honourable David Parker, Minister for the Environment. “This innovative project is a win-win-win for the environment. It reduces a significant waste problem, reuses a valuable resource, and reduces carbon emissions by about 13,000 tonnes a year,” Environment Minister David Parker said. Fletcher Building CEO Ross Taylor says this is a landmark sustainability project for manufacturing in New Zealand. “Using end-of-life tyres in cement manufacturing helps to solve a significant waste problem in New Zealand as well as improve the sustainability of a key building material. Up to 50 percent of the 6.3 million waste tyres created in New Zealand each year will now be used in cement manufacturing at the Golden Bay Cement plant instead, of going into landfill.

“There are no other large industries in New Zealand that can readily or cleanly consume the volume of waste tyres our Portland cement plant can. “The project was a significant investment over several years that involved upgrades to the plant, with specialist equipment from Denmark installed to feed the tyres into the cement manufacturing process. With the upgrades now completed, we have been successfully using tyres since 22 February. The tyres are combusted at around 1,400°C and the rubber, metal and any ash are combined into the cement. “Golden Bay Cement supplies more than half the New Zealand market as the only local cement manufacturer.

“Our cement already has around 20 percent lower emissions than imported cement and using tyres is part of the decarbonisation plan to reduce its footprint even further. It will also reduce our need for natural raw materials like iron sand,” said Ross Taylor Golden Bay Cement’s (GBC) use of waste tyres will: • Use up to 3.1 million shredded waste tyres • Reduce coal use by 15% • Reduce iron sand use by 5,000 tonnes • Reduce carbon emissions by around 13,000 tonnes

Kitchen Feature Lining

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moisture or a heat source), on narrow portions of wall where the wall meets the ceiling, on small ceiling overhangs, the back of bookshelves, as a feature in a bedroom, and many other uses. Get creative!

Installation The product is easy to install with the use of brads and construction adhesive. The finished feature can be stained, dyed and then clear-coated with your choice of product. Alternatively, each plank can be finish-coated prior to installation. Because Kitchen Feature Lining is designed so that any fastenings used are hidden, there is usually no need to fill and repair holes. Kitchen Feature Lining is generally installed vertically on the walls of a kitchen island. There are other uses, however, including on cabinet doors, at the back of kitchen benches (not near

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18 Contractual

PRODUCT KNOWLEDGE

Contractual aspects are Quick guide to product substitution quite simple; do you have the approval of the owner to make a change? Most contracts use the building work documented in the plans and specifications as the contract deliverable. If you need to change anything in the plans and specifications, make sure the owner agrees with the change. This is made easier by explaining the need for the change, in the current circumstances. The options can be set out clearly: either delay the project or make the change to the product. Don’t limit this to product changes that will be noticed by the owner! And make sure that the changes are documented, agreed by both parties, and include the answer to the obvious question – will it be cheaper or more expensive? For small changes, a text exchange is probably adequate, but more significant changes need more formal documentation. p1 of 12

Product substitution: simple rules to mitigate risk With supply chains affected by Covid-19, there are times where substitution cannot be avoided. Here's a look at some simple rules to follow when making product substitutions to ensure problems don't arise. There is no doubt that we have a bit of a perfect storm at present; a buoyant construction industry with supply line problems – due mainly to Covid–19 impacts – combined with a few local supply disruptions. The media has painted a negative spectre of this, drawing a connection with the prospect of building failure in the future through the use of inappropriate products used instead of the originally proposed products 'stuck somewhere in a container.' While this is a risk, it is one that can be adequately mitigated by good process.

MBIE guidance There are two main aspects to consider: contractual and compliance. MBIE has issued specific guidance which provides a good framework to consider for a product substitution. To view the PDF, go to building.govt.nz and search for ‘quick guide to product substitution’.

Compliance While some changes have no impact on compliance (for example, bedroom door handles and most floor finishes), most do have an impact. In theory, the compliance aspect is one that follows contractual change but, in some instances, they need to be considered together — it is no good agreeing to a change that does not comply with the Building Code. Changing a product is a change to the building consent (as the building work is defined in the plans and specifications). The way that our Building Act works is that the code compliance certificate (which is often used as a contractual deliverable) is a statement that the work complies with the building consent. Therefore, to get the CCC, what is built must match the consent (and the plans and specifications), hence the importance of the product change being recorded and approved in the consent process.

Minor variation or amendment There are two types of changes to a consent: a minor variation or an amendment to the consent. A minor variation is a change that can be processed either by an inspector/building official on site or back in the office and does not involve the need for formal changes to the consent, as long as the changes are documented and approved. Ideally, these are approved quickly and, if anticipated early, need not involve a delay to the work until approval is given. Amendments are more formal, and the Act gives the council up to 20 working days to process them.

Evaluating the change The Guidance outlines a process for evaluating whether something is a minor variation or not. Does the proposed change:

Documentation As in all matters relating to building consents, the key messages remain: provide good clear information so that whoever makes the decision knows what is being changed, the implications of the change and the evidence to support a change as being compliant.

by John Gardiner

• Comply with the Building Code? • Reflect common appropriate industry practice or standards (for example, drainage or roof truss ‘as-built’ plan)? • Not significantly increase the likelihood of a building element’s performance failure or of damage to other property? If the answer to each of those three questions is ‘yes’, then it will generally be appropriate for the BCA to grant the minor variation. If it is not a minor variation to the consent, then this Guidance issued by MBIE is useful in considering how to present the application for amendment in a way that should facilitate a speedy approval.

Managing Director of Building Confidence Ltd Through Building Confidence Ltd, I provide building regulatory advice on matters relating to the requirements of the NZ Building Act including its regulations like The Building Code and associated documents — such as acceptable solutions and verification methods. Visit www.buildingconfidence.nz or contact me on john@buildingconfidence.nz to learn more. www.eboss.co.nz/detailed/john-gardiner

SEALANTS

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PRODUCT KNOWLEDGE

In order to decide whether a change is a minor variation, there are two key documents: the Building (Minor Variations) Regulations 2009 and MBIE Guidance on minor variations.

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Working out your hourly charge-out rate is one of the first things you think about when starting your own trade business. How can you make sure you get it right? The trick is coming up with a rate that’s in line with the rest of the market, will cover you and your team's costs, and above all — improve your profitability. Calculating an accurate charge-out rate doesn’t have to be a daunting task, and you don’t need to be a mathematical whiz. However, it’s important that you take the time to sit down and work out your figures properly. The better these calculations are, the more accurate your charge-out rate will be. Below are six key considerations for working out your charge-out rate. Before you crunch the numbers with our free charge-out rate calculator, you should be clear on the following points: • Desired annual income •

Chargeable hours per year

•

Income requirements

•

Overheads

•

Break-even point

•

Profit margin

1. Desired annual income

Using a standard work week (40 hours a week, 52 weeks a year) to estimate the number of chargeable hours isn’t realistic. You also need to consider holidays (personal and public), sick days, and all the hours you’ll spend on tasks you might not be able to charge for such as: • Meetings • Errands • Communicating with customers • Generating quotes

• Sending invoices • Managing jobs/employees Try keeping a running tab of non-chargeable time for a week and see how much time you spend on tasks you don't get paid for. Realistically, you might only be able to charge for 1,350 hours a year — not the full 2,080 that 40 hours a week for 52 weeks would get you.

3. Income requirements Once you know how many hours you can realistically invoice for, you can work out what rate you’ll need to charge to cover your income and costs. Using our hypothetical $80,000 figure and dividing by 1,350 (your billable hours available in the year), you’d need to charge at least $59.26 per hour.

4. Overheads For the sake of this article, we’ll assume a figure of $50,000 of overheads for the year. Whatever the figure looks like for you, it should cover costs including (but not limited to): • Power • Tools and equipment • Rent • Vehicles • Payroll • Internet • Repairs • Taxes

CONTINUE >>

Consider the standard of living you’d like, and what gains you might make from an investment. For the sake of this article, we’ll assume an annual salary of $80,000.

2. Chargeable hours per year

BUSINESS ADVICE

How to calculate your charge-out rate

22 5. Break-even point

BUSINESS ADVICE

$50,000 divided by your 1,350 hours means you need to add another $37.04 to your income requirements. This brings our initial rate of $59.26/hr up to $96.30/hr. But we aren't done yet! This is just your break-even rate, so if you charge this you won't be making any profit.

6. Profit margin Without a profit margin, your business won’t be able to grow. By adding a profit margin, you can spend the extra cash on things like marketing, equipment, staff, etc. So, let's assume a profit margin of 15% and establish your final charge-out rate: $96.30/hr + 15% = $110.76 per hour (rounded up) Now that you know what you should be charging, the next step is to decide if this is realistic and in line with market rates. This calculation should be run regularly because industries change, prices fluctuate and the number of people you employ may go up and down. You could also enlist your accountant’s help each time you do it, so they can help decide on your final figures.

Why it's important to get it right What you charge for your services can have a dramatic effect on your bottom line, but also how your customers view and respond to you. In other words, your reputation is on the line. People want to be sure they’re getting the best bang for their buck, and sometimes tradespeople are unfairly perceived to be fleecing customers with their hourly rate.

Don’t forget the competition Unless you’re lucky enough to have captured a rare niche in the market, your hourly rate needs to be competitive with others providing the same service. Don’t be fooled into thinking you have to be the cheapest. In fact, most customers are willing to pay more if they know they’re getting a superior service. Trying to gain a competitive edge by offering the cheapest hourly rate in town doesn’t always work, since a lot of your customers will be thinking 'you get what you pay for'. It’s essential to work out an hourly rate that takes all factors into account, including your profits, market rates, and what your competition is doing. If you’re charging more than your competitors, you need to be able to justify your pricing. Your competitors will influence your pricing to some degree. Think about: • Who your competitors are and what they offer. • What the key features and benefits of their services are. • How their prices compare with yours.

• If your rate is lower than the average, you don’t have a problem, you have an opportunity. You can look at increasing your charge-out rate and improving your income. • If your rate is higher than average, it could be that you need to review your figures. Have you been honest and realistic about everything? Can you justify the higher rate with value such as guarantees, superior quality, and customer experience? • Does your business have a clear point of difference? • Is there anything that sets you apart from the competition – something you do better than anyone else? Remember, unless you’re planning to seriously disrupt the market (which most tradespeople aren’t), you should be aiming to charge as much as you can.

The bottom line You can see why it’s essential to look at several different factors when you’re deciding what your hourly charge rate should be. It can seem a bit daunting, but it’s a crucial exercise that will benefit your business. It’s also something that should be conducted on a regular basis, to make sure your prices remain competitive, that they align with market rates, and are helping to increase your profit margin.

by Andrew Wassenaar Content Marketing Manager

Tradify is the most important tool in a tradie’s belt. It’s the job management app for small trade businesses and makes the life of an owner/operator easy as. Track everything, from any device: enquiries, quotes, job notes, photos, receipts, invoices, staff and timesheets. Sorted. Join 20,000+ tradies building better lives & businesses with Tradify. Find out more at tradifyhq.com.

HAND TOOLS

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25 Christchurch and Queenstown offcut recycling services now available

Prioritising GIB® Plasterboard waste minimisation and recycling The New Zealand building industry is becoming increasingly aware of the importance of reducing the growing level of construction waste ending up in landfill. Winstone Wallboards is actively exploring innovative ways to reduce the level of plasterboard waste being generated. Working closely with customers, local councils and waste specialists, they are looking into a range of long-term waste minimisation solutions. This is especially relevant given that recent data collected from New Zealand construction sites indicates that timber and plasterboard offcuts contribute the largest percentage of construction waste currently entering New Zealand landfill sites. “Our approach starts with looking at ways to minimise plasterboard waste created in the first place. We are actively working to develop practical industry tools that help customers to do this,” says Winstone Wallboards Residential Market Manager Gordon White. “However, we also need to recognise the need to work with the wider construction industry to find viable solutions to dispose of plasterboard offcuts generated during the interior lining process. That’s why we are also helping to facilitate plasterboard recycling options wherever practical.”

Operated by Waste Management in Christchurch and AllWaste in Queenstown, customers working on new build projects can have ‘plasterboard only’ bins delivered to site during the interior lining stage. The bins, when full, are then uplifted and sent to a local recycler where the gypsum core is extracted and reused in a range of horticultural and agricultural products. This is great news for trade customers operating in these areas, who have been seeking on-site plasterboard recycling service options. It’s also very useful for Homestar and Greenstar projects, as it can help customers claim points for waste diversion under these schemes. While this is good progress, Winstone Wallboards recognises the need to continue working with the industry, waste providers and regional councils to further expand recycling capability into other regions where it is viable to do so.

To learn more about plasterboard offcut services, visit the GIB® website gib.co.nz/sustainability or go directly to: Auckland area Green Gorilla www.greengorilla.co.nz Ph: 09 636 2244 Christchurch area Waste Management www.wastemanagement.co.nz Contact: Margot Hall Ph: 027 574 3336 Queenstown area AllWaste www.allwaste.co.nz Ph: 0800 255 927 Other regions Winstone Wallboards is currently working with local waste diversion providers to expand plasterboard waste recycling options.

SUSTAINABILITY

In addition to the Auckland Green Gorilla service, plasterboard onsite waste collection and recycling services are now also available in the Christchurch and Queenstown areas.

26 INDUSTRY ASSOCIATION

Builders celebrate emerging talent and discuss critical industry issues More than 800 builders and industry stakeholders attended this year’s New Zealand Certified Builders (NZCB) annual conference and expo in Wellington. New Zealand’s top carpentry apprentice was named, a celebration of emerging talent at a time when the sector faces a skills shortage.

South Canterbury’s Marc Palmer (pictured 2nd from the left), aged 21, won the coveted title in the national final of the NZCB Apprentice Challenge, sponsored by ITM. He was competing against 18 other regional finalists from across the country. Lucile Richardson (21) from Waikato placed second, and Ryan Whitburn (27) from Otago placed third. This year’s event had a record number of women competing and several older apprentices who have started their carpentry career later in life.

The topic of sustainability

Cancer Society Chief Executive Lucy Elwood receiving a $7,000 donation from New Zealand Certified Builders, presented by NZCB Apprentice Challenge National Manager Nick. The funds were raised by auctioning off picnic tables made throughout the country as part of the NZCB Apprentice Challenge, sponsored by ITM.

“Sessions about zero-carbon building, passive housing and building waste minimisation were extremely well-attended. Consumer demand for these kinds of sustainable solutions is growing, so it has been hugely encouraging to see NZCB member builders take a keen interest in them,” says Mr Florence.

The event was part of a three-day conference which presented an opportunity for attendees to look at the sector’s most pressing issues under the lens of sustainability – for the environment, their businesses, and the trade itself.

Given the large proportion of SMEs in NZCB’s membership base, there was a particular focus on the sustainability of individual businesses and keeping existing trade professionals in the sector.

NZCB Chief Executive Grant Florence says the future-focused event examined changes to the regulatory environment, pressures and trends in the residential housing market, innovations in the ‘green’ building space and the skills pipeline into the trade.

“This is an extremely busy time for the sector, and there are multiple pressures on builders and their clients alike. This is compounded by shortages of skilled tradespeople and supplies, so it is crucial for us to analyse and deeply understand these stresses to ensure the health and wellbeing of members of our industry is well looked after,” says Mr Florence.

“This is a challenging time for the sector, with pressures mounting in terms of building supplies and skills shortages, changing legislation, and concerns about climate change. Given the current policy focus on sustainability, that is something top of mind for building and construction industry stakeholders across the board and will be for the foreseeable future.

Key insights were delivered from new research by NZCB, Building Research Association of New Zealand (BRANZ) and Registered Master Builders (RMB) that analyses the tension points for builder-client relationships and the mental health impacts of these.

Parliament has passed the Holidays (Increasing Sick Leave) Amendment Bill to increase the minimum employee sick leave entitlement from 5 days to 10 days per year. Most employees who have worked for an employer for six months or over are entitled to sick leave if they, or a dependent, are sick or injured. Currently, employees are entitled to 5 days of sick leave per year; however, from 24 July 2021 this increased to 10 days per year. Employees will get the extra five days when they reach their next entitlement date – either after reaching 6 months’ employment or on their sick leave entitlement anniversary (12 months after they were last entitled to sick leave). Employees who already get 10 or more sick days a year will not be affected by this change.

The maximum amount of unused sick leave that an employee can be entitled to will remain at 20 days.

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EMPLOYMENT

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MOTORSPORT

Green light for ITM Auckland SuperSprint at Pukekohe After more than a year of stop-start itineraries, border closures and travel bans, the New Zealand leg of the Repco Supercars Championship is back on track, confirmed for Pukekohe Park Raceway on Guy Fawkes weekend this November. Expect fireworks. All the races in the series in Australia this season have been brutally competitive, with bruised egos, broken cars, intense rivalry and more than a few harsh words exchanged between teams.

beating you really hurts; that’s what drives you, that’s what makes you try harder and keep pushing the limits.”

Legends to aspire to After first getting his hands on the wheel in Auckland at age seven, Andre has had a meteoric rise in motor racing and shows all the promise of following in the footsteps of the many legendary Kiwi drivers that have gone before him. “My dad used to race club stuff just for fun, and I used to follow him round the tracks,” Andre recalls. “I wasn’t much help, probably more of a distraction, but I’d clean the car and do a few little things to help if I could, and that’s how I got the bug.”

Kiwi driver Andre Heimgartner reckons the series has become even more intense and aggressive, fuelled by the frustrations and pent-up pressure of Covid restrictions. “Right now, everyone’s going for it. You just want to beat everyone else and the thought of anyone else

From karting to open wheelers, Andre quickly climbed the motorsport ladder to become New Zealand’s youngest-ever Formula Ford champion. More records and national titles followed and in 2012, he competed for the first time in the NZ V8SuperTourers.

29 Testing the best

On the home track

One of his most significant achievements this year was his maiden Supercars Championship victory in the NED Racing Mustang at The Bend Motorsport Park in May.

Andre is one of three Kiwi drivers lining up at Pukekohe, and while he has a fondness for his fellow countrymen, they are competitors first and foremost.

It was his first career Supercars win after 161 races, the first pole and win of the Kelly Grove era, the first win by a Kelly-prepared car since 2018 and also the first win for Ford in the 2021 season.

“We are all fiercely competitive. I don’t treat Shane or anyone else any different. We’re all out to beat each other, no holds barred. Having said that, there is always that thing in the background, we’re from the same place, and it will be great to be home again to catch up with friends and family.

While Andre describes the milestone as “significant” and his recent results as “pretty positive overall”, he reckons the best is yet to come. “It was a good win, cool to get that out of the way, but I would trade that any day to be more consistent. We need to get the car right so we can be in the top five, week in week out. “Some weekends, we’re right up the front, other weekends we’re way down the back fighting the back markers.

“Racing at Pukekohe will always be a big thing for me because I’ve been driving around that track since I was a kid. It’s where I got started. “Racing at this level was something I never thought I could do growing up. When I was watching the events at Pukekohe as a young kid with my dad and my sister, I would never have imagined that I would be doing this and racing in this series. It’s a pretty awesome thing, coming back to where it all started.”

MOTORSPORT

Based in Melbourne and now in his fourth year with Kelly Grove Racing, Andre finished the 2020 season with a flurry of top 10 results, two podiums and a pole position.

“We haven’t maximised what we have yet, but we’re working through that; by the time we get to New Zealand, we’ll have it all dialled in and hopefully get our hands on some more trophies.”

PRODUCT KNOWLEDGE

New Kaikohe wharehui Techlam recently supplied curved glulam portals for a new wharehui in Kaikohe for the Okorihi Marae Trust. This project is on its way to a very stunning completion. The curved glulam portals are exposed on the inside, bringing in a natural element, and the front has a unique forward-tleaning portal that provides an inviting entrance. This project is a result of collaboration between all stakeholders. Having done a number of marae throughout New Zealand, Techlam were keen to take on these curved portals as part of the project. They were able to provide fit-for-purpose glulam solutions that are strong and long-lasting. The glulam portals were prefabricated offsite and then installed in less than a day - proving the benefits of offsite manufacturing and especially the efficiency once onsite.

Once complete, the new wharehui will be a work of art. Thanks to all who are involved, including Bay of of Islands ITM, Henwood Construction, Design Tribe Architects and the many others who will bring this marae to life. We’ll share more photos later this year when the project is complete.

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FOR YOUR NEAREST ITM STORE PHONE 0800 FOR ITM OR VISIT ITM.CO.NZ PRODUCTS ON PROMOTION: All prices exclude GST. Prices are valid Aug 2nd – Sept 12th 2021 unless specified otherwise. Some products may not be available in all ITM stores, but can be ordered in. FREE ITM REVERSIBLE VEST: Applies to purchases made between Aug 2nd – Sept 12th 2021, and only while stocks last. The $450 (excl GST) qualifier for the FREE ITM REVERSIBLE VEST applies to the specific products advertised in this issue of Building Business. The qualifying spend must be on one product/ brand and cannot be made up of products/brands from other pages. Purchases must be made on one invoice/account. Offer is limited to one per account.

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Photo Credit: Aly Gonzáles-Dudley.