Construction collapses now a “super-spreader event”, says Swinburne governance expert

The insolvency crisis ripping through the Australian construction industry is comparable to a “super-spreader event”, a corporate governance expert says, with financial hardships spreading from one business to another reminiscent of recent public health crises.

Data from Australia’s corporate regulators shows the number of construction businesses entering administration or external control for the first time effectively doubled between the 2021-2022 and 2022-2023 financial years.

Major factors include the surging cost of construction materials and labour, punishing businesses which signed fixed-price contracts before those costs exploded.

The collapse of major homebuilders like Porter Davis has also led to consequences downstream.

The firm left $71.5