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Builders’ woes brought to light

EVIDENCE of just how tough it’s become out there for builders has come to light with a report commissioned for Business News by Construction Research Australia.

The report shows that in November the number of houses commenced dropped 56 per cent compared with November 1999. The biggest drop was experienced by Contract builders. Their work dropped 58 per cent compared with the same month last year giving our builders $88 million less in revenue than a year ago.

Total approvals in November were under 700 compared with 1,576 a year ago.

The Dale Alcock Group remains WA’s largest builder filling about 17 per cent of total housing orders for November.

Despite this, the group’s house orders have dropped from 234 in November 1999 to only 118 in the past month.

The drop was even more pronounced for the next largest player, J-Corp. It only managed to receive 67 new jobs during November compared with 172 a year earlier.

According to Construction Research of Australia, BGC’s stable of new homebuilders have also felt the drop with new orders dropping from 176 to 63 over the year.

Content Living did not suffer as much with new orders dropping to 46 in November. The North Group only had 19 orders compared with 60 a year ago, Summit and Lifestyle Homes dropped from 66 to 19 and Plunkett Homes dropped from 47 to 13 orders.

Bucking the spiral downward has been Scott Park Homes, where orders have increased from 16 in November 1999 to 24 in the corresponding month this year.

The Dale Alcock Group, J-Corp Homes and BGC have managed to maintain their earnings despite the drop, largely because of the higher average prices of the homes.

Dale Alcock had earnings of $178 million in the year ending November 30 compared with $191 million the previous year.

J-Corp had earnings of $136 million compared to $118 million last year and BGC’s Group had earnings of $114 million compared to $123 million.

Plunkett Homes had earnings of $33.6 million compared to about $40 million last year.

Webb & Brown-Neaves managing director Gary Brown-Neaves said the building industry had been “shit-house” over the past six months but looked like improving over the next six months.

He said the company was getting a lot of enquires and consumer confidence remained strong.

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