One hundred fifty basis points of interest rate hikes, combined with sustained increases in construction material costs encouraged many subcontractors to utilise other cash flow options during the September quarter of 2022.
With the RBA’s tightening cycle continuing at great speed, small and medium-sized businesses in Australia saw their borrowing costs increase by 21%. Many are subcontractors in the construction industry who, despite already being severely underserved by traditional financing, have seen their access to affordable capital become even more constrained.
Key call outs:
- Early payment requests from subcontractors in the construction industry increased by 87% during the September quarter
- Subcontractor registrations increased by 18%, representing a 6-fold increase YoY
- Construction input costs increased by 2.9% during the quarter, or 16% on an annual basis
- Small business borrowing costs rose 21%, further limiting many subcontractors access to affordable capital