The New Zealand steel industry continues to experience pain at all points along its supply chain: from manufacturers to distributors and consumers. As such, when the Reserve Bank of New Zealand (RBNZ) meets on Wednesday to consider its Official Cash Rate (OCR), it will have at its disposal plenty of data advising only one sensible option: Cut. To keep monetary policy at its currently restrictive level of 5.25% would seem both unnecessary and unwise. Inflation has already fallen from over 7% in 2022 to 3.3% in the June quarter and is set to drop to 2.4% in the September quarter. Unemployment has pushed higher in the first half of this year, rising to 4.6%, and analysts expect it to reach 5.3% by the end of the year (in line with the RBNZ’s own forecast). High interest rates have sucked so much life out of the economy that quarterly gross domestic product has been oscillating between negative and positive over the past two years. One of the indicators available to the RBNZ will be the steel-hungry activity of home

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building which saw new home consents drop by 20% in the year ended at August. Of the 33,632 new homes consented in the period, 15,597 were stand-alone houses (down 9.7%) and 18,035 were multi-unit homes (down 27%). Multi-unit homes include townhouses, apartments, retirement village units, and flats. “The number of multi-unit homes consented in the year ended August 2024 is the lowest in the last three years,” said Stats NZ´s construction and property statistics manager, Michael Heslop. Within the multi-unit homes figure, apartment consents were down 55%. “The number of apartments consented in the year ended August 2024 is the lowest in 10 years,” Heslop said.

Fletcher Building, which has borne the brunt of the weakening economy, reported in August a group net loss after tax of $227 million, following a $235 million profit the year before. It cited difficulties resulting from construction legacy provisions and losses from its civil business Higgins and Australian plumbing operation Tradelink, which it has now sold. Speculation soon arose that the building giant might need to tap investors. On Monday, September 23 it duly sought a trading halt on the New Zealand stock exchange to facilitate a $700 million equity raising at a fixed price of $2.40 a share, which represented a 17% discount on the previous day´s closing price.

At the time of the equity raising, Fletcher´s incoming Group Managing Director and CEO, Andrew Reding, said: “We believe the equity raising bolsters our financial position, assisting us to better endure near-term market headwinds. With a strengthened balance sheet, the company can focus on executing key operational initiatives in preparation for a market recovery. In addition to the equity raising, Fletcher Building remains committed to ongoing cost reduction initiatives to manage profitability in the current operating environment, and we have targeted approximately NZ $180 million of gross overhead cost savings to be delivered in FY2025.” On September 27, the credit ratings agency, Moody’s Ratings, affirmed Fletcher Building’s Baa3 credit rating and revised the outlook from negative to stable. On September 30, Fletcher Building announced it had completed the sale of Tradelink, its Australian plumbing supplies and distribution business, to Metal Manufactures. The sale price was AUD $170 million.

Now, a reminder that Steel Construction New Zealand (SCNZ) has scheduled its annual conference and awards presentation for November 7 – 8 in Rotorua. SCNZ is the leading organisation for the structural steel industry in New Zealand, representing more than 700 members from the entire supply chain. Attendees will be able to enjoy a round of golf on Day 1. SCNZ will also present a half-day technical forum focusing on the design and construction of steel structures. A panel of industry experts will cover a range of topics, including connection design principles, correct application of intumescent coatings, updates on standards and their impacts, solutions to common bolting questions, the latest advancements in welding, and successful steel construction case studies. SCNZ´s annual general meeting and a members´ conference will take place over the two days. Activities will finish at gala dinner involving the presentation of Steel Fabrication Certifications, Apprentice of the Year, Young Achiever of the Year, and Excellence in Steel Awards.

Finally, Fletcher Living has unveiled its latest residential project, The Hill, which will rise on the former steeplechase section of Ellerslie Racecourse. The land was purchased from Auckland Thoroughbred Racing in March 2022. The repurposing unlocked 6.2 hectares which will eventually accommodate 357 architecturally designed residences. At the heart of the project is ‘Belvedere’, a collection of Warren & Mahoney designed apartments. Development of The Hill began in mid-2023. Construction of homes will begin in mid-2025 and the ground will be broken in Belvedere in mid-2025 with completion expected mid-2027.