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ARTICLE · 07 JUNE 2023

Unravelling the construction industry's insolvency puzzle

Worrells
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Is the construction industry over-represented when it comes to insolvency activity?

AustraliaReal Estate and Construction
Matthew Kucianski
Matthew Kucianski
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Is its future truly bleak, as recent reports suggest?

If you've kept an eye on the news lately, you'll have witnessed the prevailing narrative of "doom and gloom" in the construction industry, often fuelled by analysis of the corporate regulator's insolvency statistics. However, a closer examination of the Australian Securities and Investments Commission's (ASIC) data reveals a more nuanced picture. Let's delve into the numbers and explore whether there's alternative explanations or contributing factors at play.

Since the financial year ending (FYE) 2014, ASIC has collected data on insolvency appointments, categorising them by industry type. Within this dataset, the construction industry has consistently stood out due to its notably high insolvency numbers. In FYE 2014, 1,802 insolvencies were recorded in the construction sector. Fast forwarding to FYE 2022 and FYE 2023 (until the end of April 2023) the numbers stood at 1,284 and 1,750 respectively; lower than

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