Construction group Rork Projects goes into administration as cost of living crisis and high interest rates ‘tsumani’ devastates building industry
Another construction company has gone bankrupt and was blamed for higher interest rates and construction costs.
Rork Projects, which specializes in building renovations and commercial properties, has appointed insolvency firm McGrath Nicol as administrators, with operations in NSW, Queensland, Victoria and the Australian Capital Territory.
Director Brian O’Rourke announced on Friday that several of his companies were going bankrupt after 26 years.
“It is with a heavy heart that I announce that after 26 years of operation, Rork Projects has been forced to enter voluntary management on March 1, 2024,” he said.
‘This was the final step in a long journey to find a solution for our employees, customers and subcontractors, and we recognize the devastating impact this outcome has on them.’
Another construction company has gone bankrupt and was blamed for higher interest rates and construction costs
Mr O’Rourke said rising interest rates and construction costs amounted to a “tsunami of impossible economic conditions”.
“Builders are in crisis due to high interest rates, labor shortages and material supply constraints due to the pandemic,” he said.
Although inflation has eased to a two-year low of 4.1 percent, he compared the current wave of construction collapses to the 1970s, when both inflation and unemployment were high.
“The construction market is facing one of the worst storms since the mid-1970s crisis,” O’Rourke said.
“While devastating for us, it is also damaging to the Australian economy and community.
“Thank you to everyone we worked with.”
In January 2024, 552 companies went under external management for the first time, marking a 53.8 per cent increase from 359 in January 2023, Australian Securities and Investments Commission data shows.
This came after the Reserve Bank of Australia raised interest rates for the thirteenth time in eighteen months in November to a twelve-year high of 4.35 percent, contributing to the most aggressive rate hikes since 1989.
Rork Projects, which specializes in building renovations and commercial properties, has appointed insolvency firm McGrath Nicol as administrators, impacting operations in NSW, Queensland, Victoria and the Australian Capital Territory