Equifax data suggests that, while the overall rate of insolvencies in March 2022 was up 5 per cent on last year, construction insolvencies were 28 per cent higher.
Iconic firm Grocon collapsed in 2020 and this year mega-builder ProBuild — with its $5 billion pipeline of work — fell over. Since then, ABD Group, Privium Home, Condev and, most recently, Next, went under. In the first quarter of the year, compared to the same period in 2021, 270 construction companies filled for insolvency, a 21 per cent jump.
Building costs have risen so much that one construction professional says he goes to work every day knowing he’ll “disappoint at least one person”.
Stretched global supply chains have fed into soaring costs for materials. Ongoing border closers boosted a hot labour market, meaning tradespeople have been charging more.
“It’s created a ‘profitless boom’, with many construction companies committed to projects that are no longer financially viable, thanks to major price increases for building materials”
Pivotal, which has built more than 1,500 homes over 15 years, was placed into liquidation on Thursday, following other major firms such as Condev and Probuild earlier this year.
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