Comprehensive Analysis of Construction Sector Dynamics: Building Approvals, Business Entries, Exits, and Administration Trends (2001-2024)

The Overview

Building Approvals

Building approvals based on smoothed averages declined by 1,559 (37%) from a March 21 to December 23 and 42% or 1,242 for new houses. If we exclude seasonal fluctuations new houses declined by more than half (53%) decreasing from 4,732 to 2,203.

March 2021 represented the highest point in building approvals since 2016 and the highest for new build approvals since July 2007 before the following period of ongoing decline.

Construction Business Entries, Exits and Exit Rate

The construction industry had the largest number of business counts in Queensland compared to any industry in 2023 at 85,496 with the highest numbers of both entries and exits. From 2017 to 2020 the construction industry experienced a declining business entry count and a more static rate of exits before a spike in entries in 2020 coinciding with a spike in building approvals.

This spike was followed by a delayed increase in exits that would see the highest exit rate in the industry in 8 years in 2023 at 15.1% with 12,666 exits and a sharp decrease in entries.

Queensland Construction Sub Sector Business Entries, Exits and Exit Rates (2019-2023)

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Carpentry services represented largest construction sub sector in terms of entries (+7758) and exits (-7264) followed by house construction (+7870) (-6951) and then electrical services (+6403) (-5304).

Other construction services (361), house construction (320) and landscape services (218) saw the largest growth in business exits in the last five years. Industries with the most exits compared to entries included bricklaying services (-117), machinery and operator hire (-48), road and bridge construction (+13).

The industry saw a 16% increase in exit rate between 2021 and 2023 with landscape services experiencing the largest increase in exit rates at (+53%) followed by air conditioning and heating services (+38%) followed by glazing services (+30%).

Housing Crisis: Rising Insolvency

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Construction companies represented the largest industry by companies in terms of insolvency (entering administration) behind other (business & personal) services between 2013 and 2024 with 3,256 companies entering ASIC's list of companies.

Between 2020-21 and 2022-23 there was an increase in +369 companies entering administration a dramatic 307% increase. Other Construction services saw the largest growth in companies entering administration and insolvency, followed by building installation services and non-residential building construction.

Building completion services saw the largest percentage increase (+633%) followed by building structure services (286%).