Two years ago, Geraldton builder Warren Taylor warned that government incentives designed to stimulate the economy could see  builders go bust in a boom . Figures from the financial regulator ASIC show he was right.  Key points ASIC figures show more than 100 construction businesses needed help in the 2022-23 financial year CFMEU says builders have been underquoting jobs to compete with the market A Geraldton builder had warned of the potential negative impact of a 2020 government stimulus In the 2022-23 financial year, 132 construction businesses in Western Australia alone entered external administration or had an administrator appointed, compared to 93 in the previous year.  Nationally about 2,000 building and construction companies shut their doors. And the Construction Forestry Maritime Mining Energy Union CFMEU believes there are many more to follow. Mr Taylor said the state government offered building incentives during the peak of the COVID-19 pandemic to boost building activity.  “They did all these you-beaut pat-yourself-on-the-back grants et cetera, and then all the builders signed up on fixed-price contracts,” he said. But he said building companies were not offered any support and were left to navigate a hot market. “The state and federal governments gave all these grants out … they just washed their hands of the whole situation and just walked away,” Mr Taylor said.  Mr Taylor says he has had to deal with exorbitant price hikes for building  material.  John Gunn The companies were caught out with the rising cost of materials and a nationwide shortage of workers. Concerns for industry Soaring demand in Western Australia’s building sector could see some companies “go broke in the boom”, according to one regional builder. “We’re still building houses at 2020 prices, so all the trades have put their pricing, their rates, up off the supplies,” Mr Taylor said. The business owner says it has been impossible to make a profit over the last few years. “We did an estimate costing from a house we built in 2018 to 2023 and just the roof and the timber went from $7,042 to $18,960; that’s 145 per cent,” he said. “None of the builders are making a cent, and actually we’ve gone back in hundreds of thousands of dollars, not a couple of thousands.” Mr Taylor said he had made changes to keep his business viable.  “We’ve restructured the whole business; we can see the light at the end of the tunnel, [but] it’s not a pleasant way to do business,” he said.  “I’m doing three jobs to keep my company going, my staff are under that much pressure from everybody ” from clients, from subbies ” it’s just a perfect storm.” Can’t keep up Master Builders Association executive director John Gelavis said the cost of building products peaked last year.  “House building material annual price change peaked at around 19 per cent at the end of 2022, which was the highest it has been since the mid to late 80s,” he said.  But he said it was encouraging that the peak has started to slowly drop. “Over the next 12 months we expect costs to remain relatively high and with certain levels of volatility,” he said. The CFMEU has blamed the hyper-competitive mindset of builders for the current market. Wide Bay Grace Whiteside Union blames deliberate underquoting Help us investigate home lending practices Many Australians who took out large loans at low rates are now struggling to meet much higher repayments. How did we get here, who is to blame and what needs to change? Tell us your story. But CFMEU state secretary Mick Buchan believes it is the builders’ fault for operating at below cost to compete with other companies.  “For over a decade the WA building and construction industry has been in a spiral of underquoting and cost cutting,” he said.  He said companies locked themselves into contracts which were not deliverable.  “They’ve left themselves undercapitalised and sitting on contracts that will now pay them less than it will cost them to deliver on,” he said. Mr Buchan said if business owners and directors took care in assessing true costs, managing risks and pricing contracts, they would not be in this state.  “Well-capitalised companies should have all traded their way through the current disruptors and still been viable and profitable,” he said. Competition for experienced trades Master Builders WA says material supply and prices are improving but finding workers remains an issue. Jordan Young Mr Gelavis said issues in the industry had been exacerbated by a lack of experienced tradespeople. “Labour shortages continue to be an issue as builders work extremely hard to complete projects for clients,” he said.  “WA will need almost 55,000 workers by 2026 and around 26,000 of those are in trades.” Central Regional TAFE managing director Jo Payne says there has been a demand for skills-based training.  “Apprenticeships and traineeships together in Geraldton over a period of time have been steadily increasing,” she said. “In 2022 we had more than 1,000 commencements in that combination.” A spokesperson for the state government said it had put a range of measures in place to manage skills shortages in the construction sector. on Australia’s housing market ‘Mismatch between supply and demand’ sends house prices soaring Here’s what the housing market looks like where you live Australia’s housing crisis in 10 graphs, from the federal budget Midwest & Wheatbelt ” local news in your inbox Get our local newsletter, delivered free each Thursday Your information is being handled in accordance with the Privacy Collection Statement . 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