The Build BriefIssue 003

Cotality's Cordell Construction Cost Index rose 1.0% nationally over the June quarter, up sharply from 0.2% in the March quarter. Annual growth lifted from 2.3% to 2.8%.

The context matters as much as the number. After the disruption to shipping through the Strait of Hormuz earlier this year, analysts forecast severe increases in material and fuel costs. Those increases have not arrived at the scale predicted. Annual growth of 2.8% remains below the 2.9% recorded in both the March and June quarters of 2025, so the cost base is accelerating from a low point rather than spiking.

Where the pressure is showing up is more useful than the headline. Cotality points to PVC and PEX pipe products, heavy plant and crane hire, fuel levies, and freight and logistics charges. These are the line items that rarely appear in a quote comparison and often appear later as a surcharge.

The practical consequence is that estimates are ageing faster than they were three months ago.

ASIC's June Corporate Insolvency Update shows 12,819 companies entered external administration in the first eleven months of the financial year, down 4.6% on the same period a year earlier. Construction was the largest category at 24.4% of appointments, well ahead of accommodation and food services at 14.9%.

There is a second, more encouraging number underneath it. Analysis of ASIC's insolvency statistics published on 13 July found 3,435 construction companies entered external administration for the first time in 2025-26, down from 3,596 the year before. That is a fall of 4.5%, and the first annual decline since the post-COVID insolvency wave began.

Both things are true at once. The failure rate has turned, and construction is still the single largest source of company failure in Australia, as it has been every year since 2021-22.

Worth keeping in proportion. Construction has the highest count partly because Australia has more construction businesses than almost any other industry. The figure is a reason to do due diligence, not a reason for alarm. It is also the reason every builder on BuilderHQ is verified against the ABN register and state licence registers before an owner ever compares a price.

Metricon has completed a prefabricated homes pilot with SIGNEX Group and Stockland at Mt Atkinson Estate in Truganina. Around 90% of each home was manufactured off-site, then transported and installed, with both homes moving from slab to practical completion in twenty business days.

The number needs one qualification to be useful. Twenty business days covers slab to practical completion. It does not include planning, approvals, site preparation or the slab itself. The saving is real, and it sits in the construction phase rather than across the whole project.

This is not an isolated experiment. New South Wales has legislated formal recognition of prefabricated buildings, funded a certification framework, and opened a program to expand local manufacturing capacity for modular housing. One clarification, because the term covers two different things: volumetric modular, whole room boxes built in a factory, suits repeatable designs such as estates, social housing and mid-rise apartments. Panelised prefabrication, wall and floor cassettes, frames and trusses, is already standard on many custom homes. The more repeatable the design, the larger the time saving.

The part that matters for anyone comparing quotes is that prefabrication moves work rather than removing it. The payment schedule is front-loaded, inclusions sit in different places, site works may or may not be inside the number, and responsibility for defects is shared across more parties. Ask both builders to price the same scope boundaries, and compare the tenders side by side so what sits outside each number is visible. Most people compare totals. The difference is almost always in what sits outside the number.