Are you worried about a building? Here’s a way to verify your contractors
Worries about launching a construction project in uncertain times can be eased with the help of a new company credit check tool, according to a credit bureau.
The construction industry had been hit hard by fixed price contracts, supply chain challenges, rising material costs, labor shortages and product shortages, such as Gib .
Some 92 construction companies went into liquidation in the year to May 23, according to figures from the Department for Business, Innovation and Jobs.
And figures from ratings agency Centrix showed that 27% of all liquidations in May were in the construction sector, up from 18% six months ago.
* Fletcher Building says plasterboard market will return to ‘equilibrium’ by October
* Is it time to give trades a break? What your entrepreneurs would like you to know
* How a Lego approach could help solve our home building crisis
Confidence in the sector had also declined, with ANZ’s latest trade outlook putting residential construction intentions at -50% in May, from -36.8% in April.
But commercial credit bureau CreditWorks launched a tool intended to give more certainty to those who wanted to do business with New Zealand companies.
CheckMate is a web-based platform that allows people to run a quick and comprehensive credit report on any business.
The information in the report included a credit score out of 1000 and a percentage indication of the probability of failure over the next 18 months.
CreditWorks chief executive Ronnie Tan said the tool came at a time when a lot of business failures were happening, especially in the construction industry.
“The construction industry has never been faced with so many challenges at the same time. The “perfect storm” is real and unlikely to be confined to the construction industry.
“We are seeing pressure on all associated trades, 98% of which are in our database.”
The key to better financial risk management is higher levels of transparency, which has been difficult for people to access until now, he said.
“The New South Wales government recently asked all construction-related businesses to openly publish their commercial credit ratings on an ongoing basis, but similar action here is unlikely to follow anytime soon. “
His company’s tool offered people a way to find out the credit risk position of any company they were considering doing business with.
After working directly with user contributors from key industries for many years, it was exciting to make the value of this data available to everyone and make New Zealand a safer place to trade, said Tan. .
“Now, before negotiating with someone new, starting construction or renovation of a house or signing a new commercial lease, it is possible for people to consult the contractor.
“Or if they are already doing business, they can monitor their contractors’ ongoing activity and market credit exposure as circumstances may change, and not necessarily through their own actions.”
It would help give people more peace of mind before going into business with someone, he said.