Australia’s building industry continues to struggle with significant insolvency challenges, according to the latest Alares Credit Insights report.
The report found that by the end of June, insolvencies among licensed building companies in 2024 already matched the full-year totals of 2018 and 2019, after tracking around 50% above pre-pandemic levels.
Alares director Patrick Schweizer expects 2024 full-year insolvency totals to exceed historical highs.
“There’s clearly a catch-up happening from the COVID years (2020-2022). During those years, we saw about 8,000 fewer insolvencies than the historical run rate. This suggests the current increase in insolvencies will continue through the remainder of 2024 and potentially into next year,” he said.
“The key question is, what will happen once the catch-up is complete?”
High numbers of insolvencies also spell bad news for Australia’s housing crisis, given the construction industry is already struggling to meet demand for new homes.
