Companies filing for liquidation are up 35% year-on-year, with construction among the worst affected, according to new figures from Centrix.
In the first five months of last year, 116 construction firms were liquidated.
This year, the figure rose to 199 companies — a 72% jump.
Across all sectors, more than 600 companies have gone into liquidation this year.
The chief executive of the Building Industry Federation Julien Leys told 1News while the figures are "not as bad" as the 2007-2008 global financial crisis, "there is pain out there".
"There are people that are going to the wall that have probably not managed cashflow as best as they could," he said.
Scarbro Construction and Construct Civil are among the firms that have failed in the past year as the industry struggles with rising inflation and higher interest rates.
Williams Corporation Ltd general manager Kathryn Marshall said she's "not surprised in the current marketplace".
The residential property developer has projects underway in the three main centres, but says the industry is already unable to meet the demand.
"If we don't supply the correct amount of housing by losing our companies and having the construction sector folding at an alarming rate, we are going to have another housing crisis looming in the next one to two years," she said.
But others in the sector are more optimistic.
"There's still businesses that are in a good cashflow," Leys said.
"This is gloom, not doom. If we think back, the GFC in 2008, 2009, the liquidations for construction companies were two-thirds higher than they are now."
The Restructuring and Insolvency and Turnaround Association said while liquidations have increased, the number is a return to pre-pandemic levels because the wage subsidy and small business loan schemes are no longer protecting companies.
SHARE ME