GOLD COAST BUILDING INDUSTRY SET FOR 'MAJOR SHAKEUP', INSOLVENCY FIRM SAYS

Written on the 22 August 2017 by Janelle Alawabdeh

GOLD COAST BUILDING INDUSTRY SET FOR 'MAJOR SHAKEUP', INSOLVENCY FIRM SAYS

MORE than 84 Gold Coast construction businesses are at high risk of insolvency with more than 3.7 per cent of the total industry facing financial failure within 12 months, according to new data by a specialist accounting firm.

SV Partners, which specialises in insolvencies, says the Gold Coast construction industry could be in for a major shake-up for builders.

"Commonwealth Games spending has buoyed construction and infrastructure businesses on the Coast but they will need to tighten their belts or start looking for new business very soon," says SV Partners director Matthew Bookless.

"When one construction company starts to struggle, it can quickly have a roll-on impact very quickly," he says.

"If one local construction business cannot pay its creditors, it can have significant impacts on other contractors' cash flows.

"Builders and construction contractors need to ensure that they have enough capital to weather short-term disruptions to their cash flow and to seek professional advice in the event downturn in business is likely to exhaust available capital reserves."

Last month, two Gold Coast-based companies collapsed leaving at least 133 tradies and staff more than $3.4 million out of pocket. Queensland One Homes and Empire Constructions went under, leaving 35 home buyers in limbo.

SV Partners August 2017 Commercial Risk Outlook Report also reveals that a total of 542 Gold Coast businesses across all industries are at risk of imminent financial failure representing 3.6 per cent of local businesses and industries. Overall this is among the highest in Queensland, with only Logan/Beaudesert set to have a higher failure rate.

The report draws upon millions of commercially-sourced records and data assets to create and analyse comprehensive risk profiles of more than half a million of Australia's incorporated businesses.

However, the data provided some good news for Queensland industries with agriculture, forestry and fishing and health care showing low numerical statistics of businesses at high risk.

Business News Australia

 
Author: Janelle Alawabdeh Connect via: Twitter

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