Monday 30-05-2022 12.40pm
No one likes to see builders liquidate and especially at the rate they are falling now but in the Pivotal case, it's beyond ridiculous to blame bricklayers and framers for their liquidation.
Bricklayers and framers face a myriad of price increases as do all subbies that are similar to those builders face.
The difference is that subbies can do something about it but many builders won't or don't. Out of necessity, subbies have put their prices up.
I know that the the company was still telling subbies that "we are fine" the day before they liquidated. Obviously they had liquidators in their office ready to pull the pin while bullshitting to subbies that they were fine.
The other item that subbies need to factor in now more than ever is builders liquidating away their money. In this climate, giving unsecured credit to a builder is like leaving a kid to disarm a nuclear weapon, its like playing Russian Roulette with all chambers full. Who will be next?
Builders have constantly and belligerently screwed subbies down over the years. Subbies haven't had a price increase in living memory, until now and thats essential if they want to survive.
Builders have the attitude that only they can make money, build and live in mansions, drive nice cars and own a boat.
Heaven forbid if a subbie has a good year and buys a 60k ute, everyone starts screaming, "THEY ARE MAKING FAR TOO MUCH MONEY, THEY ARE RIPPING EVERYONE OFF!"
Subbies should not apologise for making a profit, if the builder doesn't like the price they charge, either find someone else or do it yourself.
We once did a lot of work for a builder out Bayside way. We did glass fencing, balustrade, gates and so on. He didn't like seeing us make money so after 10 years of doing all his work, he started importing or buying his own cheap glass and spigots and only got us to do the work he couldn't.
He even had the hide to ask us to install his glass for him. The answer was a polite "fuck off". You can only take so much shit from an arrogant builder.
Every couple of years his new waterfront mansions got bigger and bigger while the plebs lived in the same houses year after year but I digress, back to today.
Food prices have shot up, Fuel prices have increased 35% in the past 12 months.
The cost of Bricks has increased, sand and mortar has increased. There is a world wide shortage of timber and prices have skyrocketed, tools of the trade are going up all the time, sea freight prices are at an all time high and most of our products come from China or elsewhere overseas, road transport costs has increased due to fuel costs going through the roof and then to top it off there are labour shortages.
Subbies are struggling to find labour and when they do they have to pay more for it such as brickies labourers.
You can partly thank the Government for that with their generous stimulus package where it made it more viable for people to stay home and get $750 a week in the hand rather than to go out and work for a living.
Builders almost always go with the cheapest quote, they screw subbies down tight in normal times by playing prices against each other but these are not normal times and now the lack of loyalty has come back to bite builders on the arse.
If a brickie is charging you too much, get another brickie and screw him down like you usually do. Oh, you can't eh? Stiff shit guys, thats your fault for your sins of the past.
Its so convenient to blame subbies but they are not the ones setting the price of the builds, thats the builder doing that.
Individually each subbies contract is just a small component of the overall project so if brickies and carpenters are the cause of Pivotals liquidation, then it doesn't say much for the administration and profitability of the company.
Brickies could only be no more than 2.5% of the whole box cost so if a builders margins are so wafter thin, thats on them.
The average house has say 7,000 bricks, if the builder allowed $1 per brick but it cost him $2, that is an extra $7,000 on the build. The average house Pivotal built in 2022 cost $290,739. Do the math yourself.
The company must have been sailing close to the breeze in the first place.
Pivotal has a great run since 2007 turning over in the vicinity of 400 million. The average build price in 2010 is very similar to the average build price in 2020 at approx $230,000. What does that tell you?
It tells me that subbies didn't get a price increase in 10 years so the builder could keep his box price the same. He must have been on auto pilot so when the shit hit the fan, he wasn't prepared for it.
From 2020 to now the average build price increased 20% as it should to cover all the rampant price increases but even 20% was clearly not enough.
Where is all the wealth built up over those 15 years of operation and 400 million turnover?
I have a question for the QBCC, how does a Category 3 builder $12,000,000 - $30,000,000 turn over $56,000,000 in 2021? That is almost double its allowable turnover.
That was double its build value on 2020 and almost quadruple its build value in 2019.
That begs the question, did the company bite off more than it could chew which coincided with the toughest of times in a century?
I feel for builders with prices exploding and labour hard to find so do your homework and put your prices up but please leave subbies alone and look in your own backyard for the answers.
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