Analysis of ASIC data released this month shows 3,435 construction companies entered external administration in 2025-26, down from 3,596. It is the first annual fall since the wave began. What sits underneath it is more complicated than a recovery.
For four years, the construction insolvency number has only gone one direction. Every release, another record. Every headline, another confirmation that the industry was in trouble.
The financial year that just closed broke that run, and almost nobody reported it.
ASIC published its latest insolvency statistics on 13 July, with data running to 28 June 2026. Analysis of that release shows 3,435 construction companies entered external administration for the first time in 2025-26. The year before it was 3,596. That is a fall of 4.5 per cent, and it is the first annual decline in construction insolvencies since the post-COVID wave started building.
That deserves to be reported accurately, including by us. TGB has used the phrase “record insolvencies” in our own coverage this year. On these numbers, that is no longer where the data sits.
It also deserves to be reported carefully, because the headline is the least interesting part of this release.
The five-year picture
Here is the full run, computed from the ASIC release. The share column is construction as a proportion of all company insolvencies nationally.
| Financial year | Construction | All industries | Construction share |
|---|---|---|---|
| 2021-22 | 1,284 | 4,912 | 26.1% |
| 2022-23 | 2,213 | 7,942 | 27.9% |
| 2023-24 | 2,977 | 11,053 | 26.9% |
| 2024-25 | 3,596 | 14,722 | 24.4% |
| 2025-26 | 3,435 | 14,011 | 24.5% |
Analysis of ASIC Insolvency Statistics, Series 1 (companies entering external administration for the first time), published 13 July 2026. Data to 28 June 2026.
The shape of that column tells the story better than any single year. Up 72 per cent. Up 34 per cent. Up 21 per cent. Then down 4.5 per cent.
The rate of increase had been slowing for two years before it turned. This is not a sudden reversal. It is the end of a curve that had been flattening for a while.
One honest caveat. The ASIC data runs to 28 June, so the financial year is missing its last couple of days. We tested whether that changes the answer. Adding a pro-rata estimate for the missing days still leaves the year down by roughly 3.9 per cent. The direction holds.
Up 72 per cent. Up 34 per cent. Up 21 per cent. Then down 4.5 per cent.
The number underneath the number
Now the part that complicates the good news, and the reason this is not a recovery story.
Fewer construction businesses failed. But the way they failed changed materially.
| How the company entered administration | 2024-25 | 2025-26 | Change |
|---|---|---|---|
| Court liquidation | 683 | 832 | up 22% |
| Creditors’ voluntary liquidation | 1,579 | 1,610 | up 2% |
| Restructuring | 785 | 448 | down 43% |
| Voluntary administration | 292 | 225 | down 23% |
| Receiver appointed | 73 | 125 | up 71% |
TGB analysis of ASIC Insolvency Statistics, Series 1, Table 1.4.3, construction division only. Published 13 July 2026.
Read those two columns together and the picture shifts.
Court liquidation is what happens when a creditor goes to court to wind a company up. It is the least voluntary outcome on the list. It rose 22 per cent in a year when total failures fell.
Restructuring is the small business restructuring process, where a director acts early and tries to keep trading while dealing with the debt. It is the outcome that most often preserves a business. It fell 43 per cent.
So the total went down while the proportion of failures that were forced rather than chosen went up. Fewer builders went under. More of the ones who did were pushed.
What is actually driving it
Three things are worth separating here, because they pull in different directions.
The first is that the whole economy moved the same way. All-industry insolvencies fell 4.8 per cent, which is almost identical to construction’s 4.5 per cent. This is not a construction-specific turnaround. Construction rode a broader shift rather than solving something the rest of the economy did not.
The second is that construction’s share of national failures has stabilised at around a quarter. It was 26.1 per cent in 2021-22 and 24.5 per cent last year. Construction remains the single largest source of company failure in Australia by a wide margin, and that has not changed at all.
The third is demand. The pipeline is refilling but converting slowly, with detached approvals at their highest level since 2021. A business with work in front of it has options that a business without work does not.
Against that, creditor behaviour has hardened. The rise in court liquidations and receiver appointments is what pressure from creditors looks like in the statistics, and it is consistent with what we reported about the regulatory environment around late payment shifting across the industry.
Where it happened
The fall was broad rather than concentrated, which is a point in favour of it being real.
| State or territory | 2024-25 | 2025-26 | Change |
|---|---|---|---|
| New South Wales | 1,567 | 1,522 | down 2.9% |
| Victoria | 1,051 | 984 | down 6.4% |
| Queensland | 565 | 563 | down 0.4% |
| Western Australia | 168 | 139 | down 17.3% |
| South Australia | 95 | 92 | down 3.2% |
| Australian Capital Territory | 96 | 85 | down 11.5% |
| Tasmania | 28 | 34 | up 21.4% |
| Northern Territory | 26 | 16 | down 38.5% |
Analysis of ASIC Insolvency Statistics, Series 1, Table 1.4.2, construction division by principal place of business. Published 13 July 2026. Small-base jurisdictions such as Tasmania and the Northern Territory move sharply on small absolute changes and should be read with that in mind.
Seven of eight jurisdictions fell. New South Wales and Victoria, which together account for around 73 per cent of all construction insolvencies nationally, both declined. Queensland was essentially flat.
What could turn this around
Two things sit directly in front of this trend, and both are known.
Payday super started on 1 July. It removes the quarterly buffer that many small building businesses used, whether deliberately or not, as working capital between progress claims. The first full year of it is the year this data does not yet cover.
And the trust tax changes coming in 2028 will reshape how a large number of construction businesses are structured, with the decisions being made well before then.
Neither of those is a reason to dismiss the improvement. Both are reasons not to extrapolate it.
What this means if you build for a living
Not much changes on Monday because of a national statistic. But three things are worth taking from it.
The industry is not collapsing, and it never was. A quarter of company failures being construction is a real and serious number, and it sits alongside an industry of hundreds of thousands of businesses where the overwhelming majority trade through, adjust, and keep building. Both of those are true at once. Anyone telling you only the first half is selling something.
The composition shift is the actionable part. The growth in court liquidations and the fall in restructuring says something specific: the businesses that got into trouble this year were less likely to act early. Restructuring is the option that exists for directors who move before a creditor does. A 43 per cent fall in its use, in a year when creditors got more aggressive, is not a good sign about timing.
Which lands where it always lands. Cash flow is the discipline that decides which builders are still here in three years, and the gap between a builder who sees a problem in March and one who sees it in June is usually the gap between the two columns in that table.
The Good Builder Take
We have spent two years reporting that construction insolvencies were at records. That was true. It is not true of the year that just closed, and saying so plainly matters more than protecting a narrative we helped build.
But this is not the turn. It is the first year the number went the right way, driven by a shift that ran across the whole economy rather than anything construction fixed about itself. Underneath it, more of the businesses that failed were pushed rather than chose, and fewer acted early enough to restructure. That is the number to watch, not the headline.
The honest summary is that the industry stopped getting worse. That is genuinely worth knowing, and it is a long way from good. It is also a reminder that where the industry is actually heading is a question best answered with the full data rather than the loudest part of it.
The caution is worth keeping. One year is one year, and a single result does not prove a method. But when the panel moves one way and one operator moves the other, the reasons he gives are worth more than the ranking he earned.
Frequently asked questions
3,435 construction companies entered external administration for the first time in the 2025-26 financial year, based on TGB analysis of ASIC insolvency statistics published on 13 July 2026 with data to 28 June 2026. That is down from 3,596 in 2024-25, a fall of 4.5 per cent and the first annual decline since the post-COVID insolvency wave began.
Construction accounted for 24.5 per cent of all companies entering external administration for the first time in 2025-26, on TGB analysis of the ASIC data. That share has sat between roughly 24 and 28 per cent every year since 2021-22, making construction consistently the largest single source of company failure in Australia.
A court liquidation happens when a creditor applies to a court to have a company wound up, and the court orders it. It differs from a creditors’ voluntary liquidation, which the company’s own members initiate. Court liquidation is generally the least voluntary route into external administration, so a rise in court liquidations is usually read as a sign of harder creditor behaviour.
Small business restructuring is a formal process that lets an eligible company keep trading while it puts a plan to creditors to deal with its debts. It is designed to be faster and cheaper than voluntary administration and to preserve the business as a going concern. It is generally only available to directors who act before a creditor forces the issue, which is why the level of restructuring appointments is often read as a measure of how early businesses are acting.
New South Wales, with 1,522 in 2025-26 on TGB analysis of ASIC data, followed by Victoria with 984 and Queensland with 563. New South Wales and Victoria together account for roughly 73 per cent of construction insolvencies nationally.
For conversations with builders who have traded through the hard years, listen to The Good Builder Podcast on Spotify and Apple Podcasts.
This analysis forms part of our ongoing coverage of where the industry is actually heading.
Last updated: 22 July 2026. Source: Analysis of ASIC Insolvency Statistics, Series 1 and Series 2, published 13 July 2026, covering data to 28 June 2026. Figures are for companies entering external administration or having a controller appointed for the first time, construction division. ASIC does not revise published Series 1 statistics after preliminary status is removed.
This article is intended for general information purposes only and does not constitute legal, financial, or professional advice. Laws, regulations, and industry requirements vary by state and territory and change over time. Builders and trades professionals should seek independent advice relevant to their specific circumstances before making business, legal, or financial decisions.
Author: TGB Editorial
0 Comments