Hundreds of Qld construction jobs to go, insolvency experts warn

THE mining industry is terminal, and 3223 businesses are on the brink. What has happened to the sunny state?

Office vacancy rates in the Brisbane CBD have reached a record high.

SOUTHEAST Queensland’s construction industry is on the brink of implosion, a new report has warned, with more than 400 businesses tipped to hit the wall in the next 12 months.

The construction hotspot of the Gold Coast is tipped to suffer most, the August 2016 Commercial Risk Outlook Report by insolvency experts SV Partners predicted, with more than 600 businesses on the state’s Glitter Strip facing potential financial ruin in the next year.

Brisbane City — currently in the midst of an apartment construction boom that is tipped to stall this year, as thousands of new dwellings flood the market and supply outstrips demand — is also tipped to take a big building industry hit.

The analysts said more than 300 businesses in inner Brisbane alone are at high risk of going under in the next year.

The report paints a dire picture for the Queensland economy, with the professional services and retail sectors also due to take a big economic hit.

It predicts as many as 3223 businesses across the state will face financial difficulty.

The predictions come as another report, released by the Property Council of Australia, shows office vacancy rates in Brisbane have soared to nearly 17 per cent, a level not seen since the economic recession of the early 1990s.

SV Partners Commercial Risk Outlook Report estimates that nationally, 2600 businesses are at risk of folding in the next 12 months, meaning almost one-fifth of them are in Queensland construction.

“The Gold Coast region has the highest number of businesses (652) facing serious financial difficulties over the next 12 months,” it said.

“According to the Commercial Risk data, this is an area of concern nationally given the number of business facing financial difficulties.

“The Gold Coast region is followed by Brisbane City and Logan — Beaudesert.

“The area of Logan — Beaudesert has the highest level of businesses (1.7%) facing financial difficulties over the next 12 months in proportion to the number of businesses in the area.”

The report came as the Courier-Mail revealed two builders based in Logan, south of Brisbane, have gone under in the past month.

Gary Deane Constructions collapsed owing creditors an estimated $13 million while DJ Builders & Son owes about $2 million.

Chamber of Commerce and Industry Queensland advocacy director Nick Behrens told the newspaper the report did not come as a surprise, “given the difficulties evident in Queensland’s domestic economy.”

The state’s once-powerful mining sector has plummeted in recent years.

Mr Behrens said in the latest Reserve Bank of Australia data, Queensland’s economic growth had plunged to the bottom tier of state economies, below South Australia and Tasmania.

It joins one-time mining powerhouse Western Australia in the bottom tier.

The capital cities of both states, Brisbane and Perth, were also the only ones where office vacancy rates increased, according to the latest Property Council of Australia’s Office Market Report.

The rise in Brisbane’s vacancy rate from 14.9 per cent to the record high of 16.9 per cent in the six months until July was described as “unexpected”.

The PCA’s Queensland executive director Chris Mountford said with construction of the Queensland Government’s new executive building, 1 William Street, also expected to be completed this year, the figure is expected to rise again.

However, he said given 115,000 square metres had opened in the Brisbane CBD in the first six months of the year, the office market had shown resilience.

“While the recent supply additions had a negative impact on the headline vacancy rate, there is positive news for Brisbane, with net demand for CBD space reaching five times it historical average over the same period,” he said.

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