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Speaker 1: I told you we had more good news. For the

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Speaker 1: first time in twelve years, construction costs of drop and

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Speaker 1: they fell one point one percent of the three months

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Speaker 1: to June. Material supply is back to normal. Dwelling consents, though,

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Speaker 1: are falling, and there's a pipeline of jobs that's coming

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Speaker 1: to completion. So what's coming next. But all of this

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Speaker 1: is ease pressure, freed up capacity, and reduce costs. So

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Speaker 1: can we build? Executive director of the Construction Industry Council

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Speaker 1: joins me. Now it's Tommy Honey. Hello, Tommy, Hi, Hi.

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Speaker 2: How are you doing? Andrew? Good to talk?

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Speaker 1: Is this good news?

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Speaker 2: It's well, yes it is, but there's you know, there's

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Speaker 2: it's a self cloud. It's a self aligning pats to

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Speaker 2: the cloud. It's great for those people who've been holding

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Speaker 2: back and waiting to build or renovate. And following on

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Speaker 2: from your previous interview, I think we've all been on

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Speaker 2: a sort of weight and see process about inflation and

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Speaker 2: where the economy is going. So yeah, it's good news

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Speaker 2: for those wanting to build, but it's probably a little

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Speaker 2: bit foreboding for the for the construction sector itself.

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Speaker 1: And well, exactly we've heard so many headlines about the

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Speaker 1: construction sector feeling the squeeze recently, companies going out of business,

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Speaker 1: et cetera. They're already operating at a bare minimum, you know,

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Speaker 1: so what's the future for them?

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Speaker 2: Well, the big thing for us in the construction sector

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Speaker 2: is pipeline. What are what jobs you have coming up?

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Speaker 2: And how far ahead can you see work so that

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Speaker 2: you can stay in business, keep employing people, keep building,

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Speaker 2: keeping work. And when things are slow, which they happened

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Speaker 2: in the last eighteen months, that pipeline gets small, shorter

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Speaker 2: and shorter. So you know, a large construction company is

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Speaker 2: going to want you know, these the huge ones are

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Speaker 2: going to want, you know, nine twelve months beyond pipeline.

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Speaker 2: But your local builder building houses and a small team

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Speaker 2: sometimes that that pipeline is only three to six months.

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Speaker 2: When it drops down to one to two months, you know,

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Speaker 2: it's time to our belts. So we really we appreciate

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Speaker 2: the opportunities that that increased competition brings, but it actually

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Speaker 2: often it's builders themselves reducing their margins as thin as

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Speaker 2: they can just so they can keep keeping work. So good, good,

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Speaker 2: good for the clients. Tough on the builders at the moment,

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Speaker 2: but we hope that will turn.

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Speaker 1: That's economics one o one. So you say it will return,

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Speaker 1: how long will it take for a recovery in your

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Speaker 1: poor beleagued sector.

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Speaker 2: Oh well, you know, you know, a stant inflation, people

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Speaker 2: expecting it to drop sharply. That's actually kind of a

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Speaker 2: good sign. Easy thing. So seen interest rates come down

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Speaker 2: also a good sign. But we kind of follow those

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Speaker 2: those cycles, and so the quicker that cycle happens, the

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Speaker 2: quicker week in return. I always like to try and

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Speaker 2: to describe the sectors as like a flywheel, you know,

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Speaker 2: and when it's off and running, you don't have to

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Speaker 2: add much to it to keep it going. But when

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Speaker 2: it slows down, it can take a long time to

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Speaker 2: crank up again and get back up to speed. So

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Speaker 2: that's what we're hoping for. I guess the good signs

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Speaker 2: in this news from core Logic is that the component

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Speaker 2: of construction that was due to the product side, if

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Speaker 2: you like, this supply chain that has come back to

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Speaker 2: what they call normal because it did spike a lot

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Speaker 2: during COVID.

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Speaker 1: So, Tony, we wish you all the very best of

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Speaker 1: Tommy Honey, who is the executive director of the Construction

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Speaker 1: Industry Council.

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Speaker 2: For more from the mic Asking Breakfast listen live to

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