Like the rest of the Australian economy, the construction industry was getting back on its feet after Covid-19. But the sector has now been hit by a perfect storm of staff shortages and cost blowouts as inflation surges globally.
Many of these forces, particularly cost rises, are beyond the control of construction companies. But construction also has major industry-specific challenges. Construction has the worst late payment of any industry. About 12% of construction businesses are more than 60 days in arrears on their payment to suppliers.
The risk is that construction collapses cascade down, creating a chain reaction of failed businesses. That could have a serious impact on Australia’s economic recovery.
In the wake of the high-profile construction collapses, there are calls for industry reforms and greater support from Government. But there are no guarantees those calls will be met imminently.
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