The “Ponzi scheme” of an industry relying hand-to-mouth on cash flow is cutting a swath through companies squeezed by rising costs and fixed-price projects.
Construction industry insolvencies have marched up to a nine-year high, the latest figures from corporate regulator ASIC show, as the “Ponzi scheme” of an industry relying hand-to-mouth on cash flow cuts a swath through companies squeezed by rising costs and fixed-price projects.
The financial-year-to-date figure is the highest since 1802 in 2014 and a 43 per cent jump on the 2021 total of 953 construction insolvencies, when creditors such asHouse of cards: building industry insolvencies are climbing.The post-pandemic fallout in an industry supercharged by incentives and cheap money, hit by surging costs and now finding sales slowing exposed a key weakness of the cash flow-dependent building industry, said Association of Professional Builders co-founder Russ Stephens.
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