Latest / The Good Builder Podcast / The Daily Dose #347 | Construction Insolvencies, Rising Concrete Costs & Queensland’s $174B Pipeline
Transcript
- Az (00:56) Good morning and welcome back to the Good Builder Podcast. It's Monday, and as you know on Mondays, we like to sometimes do a bit of a solo episode where we run through a few of the things that are going to impact you out there and a few things we've reported on. Today, one is that we're going to have a chat about a construction industry insolvency number that we reported on last week. That was absolutely horrific until you actually get underneath it. The second is the cost increase builders are. Paying that some of the major construction cost indexes aren't necessarily showing. And the third is a pretty extraordinary number out of Queensland. Nearly $174 billion worth of major construction projects are in the pipeline until 2030. And I'll take you through all of that. It's all on site on the Good Builder 2. And also stick around because we'll give you a quick heads up on some of the conversations that we're going to be having this week. And there are some absolute crackers of ones. So I hope you're having a great Monday and we better get into it. Now, the first thing that we wanted to talk about, and I alluded to in the entry, and I alluded to in the intro was the story around the 540 construction companies that failed in one day. Now, that's probably the craziest number we've seen, and one of the craziest numbers that we reported on last week. But on the 25th of August, 540 construction companies entered voluntary administration on the same day. And if you saw that number in isolation, you probably think things have fallen off a cliff. But there is a massively important detail in that. All 540 companies were part of the same corporate structure. the University Property Group, entities behind the Bathler Group. Take that single event out of construction share of company failures across July. And August drops from thirty seven point four percent to twenty-three point five percent of all insolvencies around Australia. Now, 23.5% isn't exactly something to celebrate, and there's still plenty of stress when you're having a look at that number. But this is why we keep trying to go underneath some of these numbers here at The Good Builder. Because for the next 12 months, we're going to hear statistics about construction and solvencies. And that one event is now sitting inside the data. You probably heard that podcast that we did with Chris Baskerville from Jurst Sutherland around. The fallout of what's going to happen over the next 12 to 18 months. so when someone tells you next that construction insolvencies have exploded, ask what's actually underneath that number. And if you keep up with us, you'll probably know. Context matters all the time. The second story that I want to go over, We've been looking at concrete surcharges, and we've been noticing some suppliers have been recovering higher fuel and freight costs through surcharges and levies rather than simply changing their published concrete price. We found fuel surcharges of around $8 per cubic meter being applied in late 2026. And there's a bit of an interesting problem here. From the builder's point of view, it doesn't really matter whether somebody calls something a price increase, a fuel levy, or a freight surcharge. It still ends up on the invoice. But what can matter when we're trying to understand what's happening to construction costs from the major indexes is that this isn't captured. It's another example of why the headline number and what builders actually experiencing on jobs can sometimes be two very different things. And if you're quoting work at the moment, these little costs matter because they're rarely little once you multiply them. across multiple projects or across an entire build. So check that article out. We thought that one was another interesting article that you should get your head around and ensure that you're capturing the right data. And hopefully, same sort of thing. Concrete companies can start to look at how they can be a bit more transparent in their pricing. So you're capturing it easier, but keep an eye out for that one. We'll put all the links below. Now, story number three. This was another big number that I spoke about in the intro of this podcast. And Queensland has now six hundred and seventeen major projects worth 173.76 billion in the pipeline through to 2030. And at first glance, that's obviously a great story about investment. But the thing we're more interested in here at The Good Builder is where the people to build all of it are gonna be coming from. Because residential builders aren't operating in their own little labour market. And a major infrastructure project doesn't need to build houses to compete with housing. It needs electricians, they still need plumbers, they still need concretors, they still need earthworks crews, supervisors, engineers, project managers, all of the same sort of people that residential construction needs as well. so whenever we talk about Australia's housing targets, I think we've got to stop looking at residential construction in isolation. And this is a bit of this the crux of this article. It's not just how many houses do we need to build. It's what else are we asking the same workforce to build exactly at the same time. We're digging further into this one because I think there's a much bigger story sitting underneath that $174 billion figure. But we've broken it down a fair bit on the good builder. And again, we'll put the link in it. One of the things that we've seen since doing The Good Builder actually is the amount of fragmentation and how across the industry, different associations and things look at this stuff. And I think we've got to have a broader view in order to capture the reality of what's happening out there and are we going to achieve the goals and what exactly do we need. There's actually a few other interesting stories that I'll quickly mention that were put up on the site and one was around the Productivity Commission and the other was around how different states are looking at totally different things when it comes to productivity, efficiency, achieving these goals, red tape, all that sort of thing. So they're all on the good builder and I think we need a bit more visibility across the board rather than people working in isolation in this industry. Now a quick TGB update. There are some big pods coming We have Mitch Thompson from VistaBilt coming in hot on Wednesday. And then on Friday, we sit down with Ben, the latest franchisee to join Stroud Homes. And they are the biggest franchise group in Queensland. And he is one of the most successful to ever start. So that was a really cool conversation that we had with Ben. He's a bit of a weapon, so that's going to be a cool one. And so is Alex from Attlee, who we will be having in the next week. As well, we had a got to spend a bit of time with him. So there's some awesome conversations with a lot of learnings, like we always try and deliver here at The Good Builder. That's your Monday briefing. Three things that you got to keep your eye on this week, just to quickly recap. Don't take the insolvency statistics at face value. Watch the costs occurring outside the headline indexes that are being reported in the media. And when somebody talks about Queensland's housing pipeline, or Australia's housing pipeline. Remember, Residential is competing with that almost $174 billion of construction for people and capacity, as we said. So we'll keep digging into all three. Have a great week, guys. I'm as from the Good Builder once again, and we will see you on the next one, which is going to be cool, which I said is Mitch Thompson from VistaBuild. So like and subscribe, share this around to someone who you think will need it. And we thank you guys for listening as always.