More construction companies might be heading towards insolvency because of a cash flow crisis and global material price increases across the board.

The home building end of the market is also struggling, with some builders offering cash payments to clients because they can’t meet fixed-price contracts.

“Construction is not in the game of banking, it’s in the game of building things, and we need to change our approach there … but also the risks we ask contractors to take,” Australian Constructors Association CEO Jon Davies told Gareth Parker on 6PR Breakfast.

“Some of these projects can take three, sometimes four years, and we’re asking contractors to get out their crystal ball and to lock in a fixed price that takes into account all eventualities, which is just not fair and not reasonable.”

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