Big builders enjoy recovery as insolvencies hammer small players

The fortunes of Australia’s largest commercial contractors have improved as cost growth slows and loss-making projects end, but increasing insolvencies among smaller subcontractors and suppliers are putting that recovery at risk by narrowing the industry base on which larger builders rely to get work done.

Financial reports lodged with the corporate regulator show the country’s biggest builders enjoyed a strong turnaround in the year to June, with profitability and margins increasing, as they put behind them the brutal losses triggered by fixed-price contracts.