More than 18% company failures in 2022 from construction industry

Katie Bradford
Source: 1News

In another sign the construction industry is in a precarious position, 1News can reveal more than 18% of company failures in the last year were building companies.

The industry is facing a multitude of problems, including labour and material shortages and increasing costs.

China’s recent lockdown and slowing down at Shanghai’s port have added to the world’s supply chain problems.

A number of companies have gone into liquidation recently, including Wellington’s Armstrong Downes.

And just a few days ago, Tauranga house building company Oceanside Homes went under.

1News has seen the liquidator's report, which reveals numerous creditors owed almost $500,000. Climbing debt is blamed for the company’s eventual collapse.

Figures released to 1News show that since the start of this year, 92 construction companies have been put in liquidation. That’s out of a total of 494 liquidations. It’s slightly higher than the same period last year.

It comes as the Reserve Bank Governor says construction and housing costs are the greatest domestic threat to inflation and the economy.

Adrian Orr told Parliament's Finance and Expenditure Select Committee on Thursday that the “boom and bust” nature of the industry makes it very hard to find solutions and bring the problems under control.

The level of growth in the industry is currently “unsustainable”, he said, and the question was: “Can we slow things down gently or is it going to come with a thud?"

"That is going to take a lot of sensible conversations."