Another Queensland construction company has crumbled amid intensifying market conditions, with skyrocketing material and labour costs making business-as-usual untenable for swathes of businesses within the flailing construction sector.
Solido Builders was founded by husband and wife duo John and Libby Hattink in 2014 but at the weekend they called in the liquidators, saying margins for small businesses were already thin without external pressures like international conflict and the pandemic.
“We made a loss on a few projects and decided the best thing was to wind things up. Our subbies have been paid and we have not just pulled the rug out from under people,” Hattink told the Courier-Mail.
The Cleveland-based company made its name crafting luxury homes, but has become the latest causality in the construction crisis that has come down particularly hard on Queensland businesses.
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Gold Coast-based Pivotal Homes folded last week, with 16 staff told they had lost their job on the spot in a boardroom meeting. Owner Michael Irwin pointed the finger at “gouging” tradies who he claimed were putting up their prices as supply costs rose.
It came as rumours continue to swirl about the fate of Metricon, the country’s largest building company, with the NSW government reportedly building a $100 million bailout package for the ailing company after it met with the Victorian government over its social housing contracts.
Metricon confirmed on Friday it had received a $30 million capital injection from its owners to demonstrate their confidence in the building giant’s future.
“This significant injection of capital by the owners demonstrates to our customers, employees, sub-contractors and suppliers our confidence in the viability, profitability and future of the Metricon business,” acting CEO Peter Langfelder said.
“We hope it may help cultivate a groundswell of support for Metricon, which is a great Australian success story.”
Metricon employs about 2500 staff across Australia’s eastern seaboard with 4000 houses under construction.
Earlier this month Sydney construction firm Next entered voluntary administration, with the aged care and student accommodation builder scrambling to secure a deal with creditors to avoid its total collapse.
In April, Western Australia-based New Sensation Homes and Home Innovation Builders both slipped into liquidation, with New Sensation Homes director Danny Coyne blaming a “perfect storm” of factors for the downturn.
In March, construction giant Condev confirmed it had called in the liquidators amid rising costs. Founders Steve and Tracy Marais were unable to lock down a reported $25 million bailout from developers.
Condev’s billion-dollar project list included the Cannes Waterfront in Surfers Paradise, The Brookes Residences in Varsity Lakes, Natura and Brake Street both in Burleigh, and the Jindi Apartments in Palm Beach.
Probuild had collapsed just weeks earlier in March, with up to $5 billion outstanding in commercial and public sector projects. Some 750 employees got the sack.
“We are caught up in a set of circumstances not of our making,” a Probuild spokesperson said at the time.
Privium and BA Murphy both folded in December last year, affecting more than 2000 individual home-buying customers across Queensland, Victoria and NSW, and hundreds of tradies.
The latest Performance of Manufacturing Index (PMI) figures from the Australian Industry Group shed light on the mounting cost pressures facing local constructors: its index of construction materials, including timber, bricks, and glass, rocketed up 9.6 points in April alone.
The index now sits at 70.6 points for the month, where any reading above 50 represents growing costs.
“Skilled labour shortages, rising labour costs and supply chain disruptions remain the principal constraints on manufacturing,” Ai Group said in its report.
“These pressures increased in April and remained at all-time highs for the Australian PMI series.”
And Australian tradies are stressed out too. YouGov spoke to 513 tradies across Australia and found two-thirds of construction workers are doing it tough mentally, with long working hours and work/life balance taking a mental and emotional toll.
Construction crisis timeline
December 2021 — Privium, BA Murphy collapse
March 2022 — Probuild, Condev collapse
April 2022 — New Sensation Homes, Home Innovation Builders collapse
May 2022 — Pivotal Homes, Next, Solido Homes collapse
