So not as bad as it could have been, you thought it might be?

Uh, surprisingly low number, I'd have to say.

Uh, 1.1% as you said in your intro, uh, for two two.

Uh, well below what expectations were, given the backdrop of Iran war and the cost escalation we saw in building project, uh, pro- um, products, um, soon after.

Um, we, h- it has sort of calmed down, uh, the building cost escalation we're s- we're seeing, so a pretty good number.

And I think it's important also to note that the overall number for 12 months is below what, uh, Cotality are talking about, uh, as a, a usual number of, uh, 4%, um, annually.

But what are you seeing, hearing out there?

I'm starting to hear that the market is slowly changing.

Do you think we're going to see more firms folding?

I think we're going to start seeing the optimism that we were expecting at the start of the year being realised in the second half of the year.

Already starting to see a bit of that with our members at our conference last month, and there was a ripple of positivity going through the conference.

I was with members in Christchurch last week, met a member who has 40 live construction projects, Another one who's found it a little bit tough with new homes and starting to do things like commercial works.

So that type of thing has been on the cards for quite some time as new builds have been falling away.

There's been an increase in our members doing renovations and extensions because they're all trade qualified.

Otherwise, it couldn't be a member of New Zealand Certified Builders.

What have you been told about the proposed changes there and the impact that might have and who might it impact?

If we kind of took the pulse of the industry midway through 2026, what's your sentiment? What are the members saying? The

sentiment would be it's like the last two years recycled.

So we ended last year with some pretty good sense that things were, you know, the wheel was turning and things were going to the better.

We saw central government come out about October last year with some big announcements.

There was some school work going on.

of a reasonable number.

There was about $600 million worth of defence housing, I think it was.

Right.

How much is the Iran war slowing the construction sector?

So I noticed that the biggest drop in construction activity was in the commercial space, and I do get a sense that some of those large jobs that have been keeping some of those companies going for the last three, four years, some of those big projects have been grinding on while we've been in challenging times, they're coming to an end.

And some of those commercial contractors, there's no big project to replace them.

So that's sort of been playing out.

But in the residential space that I represent with New Zealand Certified Builders, we're seeing...

We're seeing some really good signs at the tail end of last year and into this year that activity was starting to increase and we're seeing building contracts being downloaded to great extent and employment contracts being taken out by employees.

by builders, etc.

Malcolm, how quickly can the industry turn around?

How much is the Iran war slowing the construction sector? So

I noticed that the biggest drop in construction activity was in the commercial space, and I do get a sense that some of those large jobs that have been keeping some of those companies going for the last three, four years, some of those big projects have been grinding on while we've been in challenging times, they're coming to an end.

And for some of those commercial contractors, there's no big project to replace them.

So that's sort of been playing out.

But in the residential space that I represent with New Zealand Certified Builders, we're seeing...

We're seeing some really good signs at the tail end of last year and into this year that activity was starting to increase and we're seeing building contracts being downloaded to a great extent and employment contracts being taken out by... by builders, etc.

So there's some confidence returning to the market.

Malcolm, how quickly can the industry turn around?

Do you think if they're still sticking around right now, times are getting better or is it still a bit of a grind?

Look, we're still seeing liquidations through into what really feels like the start of of an economic recovery, that we're still seeing is not unusual.

There will be building firms that have taken on low-margin projects or projects that they really just shouldn't have taken on just to get through, to keep their staff, to keep their wheels moving.

And some of them, to stay in business over this very terrible time, this last two years, will have taken on debt levels to stay afloat in the belief that things would turn around.

And, Sally, this isn't...

in diamond that went on diamond an example that they're still flying on through they haven't been able to hang on long enough for the recovery that really is starting to feel is underway

yeah now um when do you reckon we're going to start spending on building

well i'm starting to see that builders are starting to get themselves thinking about growth and there's a couple of points of data I can point to.

Do you think, I mean, obviously we've been through the tough patch, do you think if they're still sticking around right now, times are getting better, or is it still a bit of a grind?

Look, that we're still seeing liquidations through into what really feels like the start of an economic recovery, that we're still seeing is not unusual.

There will be building firms who have taken on low-margin projects, or projects that they really just shouldn't have taken on just to get through, to keep their staff, to keep their wheels moving.

And some of them, to stay in business over this very terrible time, this last two years, would have taken on debt levels to stay afloat in the belief that things would turn around.

And certainly this is an example that they're still flying on through.

They haven't been able to hang on long enough for the recovery that really is starting to feel is underway.

Now, when do you reckon we're going to start spending on building? Well,

I'm starting to see that builders are starting to get themselves thinking about growth.