Julien Leys: Building Industry Federation chief executive on the downturn impacting the construction sector

The downturn in construction continues.

The Post is reporting almost a third of all business liquidations are construction companies - up from a quarter in 2022.

Building Industry Federation chief executive Julian Leys says it's been a tough few months.

But he says things are levelling out.

"We still have a good number of building consents - sitting around at 33-34,000. We still are seeing active work with construction in sub trades."

LISTEN ABOVE

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Heller due to see Allen nearly one third of all
business liquidations and construction companies at the moment. Now. That's
up from twenty twenty two, when the number was just
one quarter. This is according to a new report from
the Building re Research Association out today. Julian Laser is
the chief executive of the Building Industry Federation. Hey Julian, Hey, Heather,
what's going wrong?

Speaker 2 (00:20):
All? It's tough and this is a reflection of how
hard the last couple of months has been. But on
the plus side, I think things are leveling out. So
you know, we still have a good number of building
consents sitting around thirty three thirty four thousand. We still
are seeing active work worth construction and subtrades. But the

(00:44):
insolvency pressure, you know, is there, and the key challenges
always is getting paid on time because it's all about
cash flow.

Speaker 1 (00:51):
How much of this has got to do with the
fact that in some cases building companies are poorly run
tech they're quoting far too low just to win the
the job in the first place.

Speaker 2 (01:02):
Well, IOK, that is certainly part of it, and we
shouldn't forget. You know, there's three hundred thousand people that
work in the building and construction sector. Thousands of businesses,
many of them small, not all of them, you know,
have the skills to manage cash flow and to have
cash cash reserves, and so you know, those companies are

(01:22):
some of the ones I suspect that are getting into trouble.
So yeah, financial management is definitely, you know, a key
part of this.

Speaker 1 (01:33):
Deilian, you think we've reached the bottom, Is it upwards
from here?

Speaker 2 (01:36):
I would think so, because from what we're seeing with
sales going through the merchants, through the manufacturers, things are
concrete and steel they are saying to pick up, which
means that there is activity there. I think people are
now getting a bit bolder in terms of making decisions
to crack on with projects, and we must we shouldn't forget.

(01:56):
Rather that that takes time, you know, from the time
of decision it's made. So I think come spring, you know,
once we get through winter, which is always slow anyway,
we'll start to see a bit more activity.

Speaker 1 (02:08):
Good and please you hear it, Julian, Thanks so much.
Julian lais Chief executive Building Industry Federation. For more from
Hither Duplessy Alan Drive, listen live to news talks it'd
be from four pm weekdays, Or follow the podcast on
iHeartRadio