Another business in the troubled construction industry has collapsed, with a Tasmanian builder of modular homes placed in administration after more than three decades in business.
However, despite the string of collapses in the niche segment of the construction sector, an IBISWorld report from last month found demand for prefabricated metal buildings in the residential market is expected to increase.
A statement from corporate advisory firm McGrathNicol confirmed “Tasmania’s leading manufacturer of modular homes”, Mornington Park Homes, was placed in receivership.
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Rob Kirman and Matthew Caddy of McGrathNicol were appointed and took control of company assets and affairs. Following an assessment of its financial situation, it was determined Mornington Park Homes could no longer continue trading, Kirman said in a statement.
“McGrathNicol is in the process of seeking urgent expression of interest for the business and assets of Mornington Park Homes and will be placing a public announcement calling for expressions of interest in the coming days,” Kirman said in the statement.
A spokesperson for McGrathNicol told SmartCompany no further information was available at this stage.
Over the past 32 years the business has produced nearly 32,000 transportable homes in Tasmania.
Mornington Park Homes is just one of a long list of construction companies to go under recently, with Australian Securities and Investment Commission figures indicated one-fifth of the reported 10,632 company collapses last year were construction companies.
In November last year, New South Wales modular homes company Trade Fusion also collapsed.
An IBISWorld report from last month found demand for prefabricated metal buildings in the residential market is set to rise.
“Demand is forecast to expand solidly over the next five years, with the value of new housing construction averaging cyclical growth of an annualised 4.3%,” the report says.
The industry is dominated by small businesses, with 90% of companies employing fewer than 20 people.
The industry-wide report into the manufacturing of prefabricated metal buildings found the annual growth rate for the industry between 2008 and 2013 was 8%, driven by the mining boom and the one-off government stimulus for refurbishment of primary school classrooms.
The report says while businesses supplying goods to the mining industry grew significantly during the 2000s, the housing sector struggled, leading to the high number of insolvencies in residential construction.
“Firms supplying products to the household and commercial property markets have encountered subdued demand conditions since the mid-2000s,” the report says.