Construction’s insolvency crisis is entering a more dangerous phase
Australia’s builders may be past the first insolvency wave, but rising input costs and tighter regulation point to deeper structural risk.
Construction accounts for 27% of all corporate insolvencies in Australia, making it the single largest source of company failure for the fourth year running.
And there is more risk on the horizon.
A perfect storm has hit the industry, as it has contended with Covid lockdowns, cost inflation and scarce labour. But storms pass. The industry may now be living through something more permanent: a structural reset.
Australia recorded more than 14,700 corporate insolvencies in FY2024-25, the highest level since the data series began in 1999-2000. Australia was also among the global economies to reach a 10-year insolvency high in 2025 — an unwanted distinction.
The concentration of construction failures within that number is unprecedented for a single industry. That is not a cyclical wobble. It is a sector-specific repricing of risk.
