Building costs soar and no end in sight

Master Builders Association national vice-president Johnny Calley says more companies will go under due to the sharp increase in the price of materials.

The construction industry is in a precarious position. More than 18% of company failures in the past year were building companies going under mainly because of labour and material shortages and increasing costs.

Since the start of this year, 92 construction companies have been put in liquidation. It comes as the Reserve Bank Governor Adrian Orr says construction and housing costs are the greatest domestic threat to inflation and the economy and new figures show the cost of building a new home is increasing at its fastest rate on record.

Building and construction is a significant contributor to the national economy so its performance matters. It’s currently the third largest contributor to GDP, some $20 billion per annum and sustaining over 540,000 jobs.