Last week, yet another building and construction firm hit the wall, collapsing into liquidation owing $5.7m straddling two different states and territories, leading to a “domino effect” impacting 130 projects and 80 staff members.
This is part of the continuing litany of failure, as data from the Australian Securities & Investments Commission (ASIC) shows that a total of 1,245 companies were declared insolvent in May alone.
This is 44% higher than the same period in 2023 and 122% higher than in May 2022. It is also the highest number of insolvencies in a single month since ASIC started reporting this data in 1999. The surge in insolvencies was driven by the construction sector, which recorded 313 insolvencies in May – a record for this cycle.
This is an object lesson for anyone considering contracting with the building and construction firm of any size; do your own due diligence! It also presents another barrier to the Albanese government’s target of building 1.2 million homes in five years—a level of construction that Australia has never achieved before, despite record activity compared with other countries and over 5% of people working in the sector.
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