Forum Archive Index - November 2000

[Mike Hudson <MHudson@placemakers.co.nz>]

Peter wrote

"Hows your business going - the building industry doesn't look too far down
in the dumps. Or am I asking the wrong people?"

Our business is going remarkably well - we are busier than we have been
since 1994 which was a boom year for the construction industry. I think that
the economy is a lot stronger than a lot of people think. Certainly there
has been a slowdown in the metropolitan centres but I believe it has been
more than offset in the provincial and rural areas. In the Top of the South
all the builders are flat stick and there is a strong recovery in the Deep
South driven by export returns and tourism and lifestyle developments,
witness the current spat between Sam Neil and Warren Cooper 

Housing starts have slowed but there has been an upswing in commercial work
particularly  government driven jobs like the education and health sectors.
The two risks I foresee  for a good year for the construction industry  in
2001 are

*       A shortage of skilled labour which is becoming evident in our part
of the world.
*       Inflation. We are currently seeing a raft of price increases in
materials, some of them in the 20% to 30% range which could force the
Reserve Bank into an Interest rate hike when they flow through into the CPI 

I still believe that despite the South American millstone (see my previous
posts) that FLB is undervalued and is the best bet for medium term gain
among the Fletcher stocks

Cheers
Mike H



Mike  



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