“She’ll be right” attitude dangerous for struggling construction businesses
Insolvency experts say some operators in financial trouble are burying their heads in the sand when it comes to their business finances
Kiwi businesses are being urged to avoid taking a “she’ll be right” attitude, as liquidations in the troubled construction industry are predicted to keep increasing.
New data from credit rating agency Centrix shows 27 percent of all liquidations in May 2022 were in the building sector. This is up from 18 percent six months ago, as fixed price contracts, supply chain challenges, higher material costs and labour shortages begin to bite, according to the agency.
This is considerably more than in the hospitality sector, which saw only … read the full story here
Reserve Bank warns of more construction firm collapses
New developments in the collapse of Decmil Construction NZ highlight how one failing domino can endanger struggling building firms throughout the country.
The liquidator of collapsed building firm Decmil has launched arbitration proceedings against another construction company, as ripples spread through the industry.
The Reserve Bank says there is a risk interest rate increases and house price falls will lead to “a large decline” in construction sector activity. “In such a scenario, we would expect to see more developer insolvencies and a large number of incomplete or cancelled projects,” it says in its monetary policy statement. “This would result in a steep decline in … read the full story here.