Australia's largest home builder, Metricon, has been forced to deny reports it is in financial difficulty after the unexpected death of its founder just days ago.
Metricon chief executive and founder Mario Biasin died on Monday, and general manager Peter Langfelder was appointed acting chief executive.
Metricon has been hit by rising building costs, supply constraints and soaring subcontractor fees, but the company strongly denied it is on the brink of collapse and said it has no solvency problem.
Mr Langfelder said it was "business as usual" for Metricon, and all staff and suppliers had been paid "on time, in full".
"There's no truth to the rumours, we're in a really strong, viable position, we've got the support of our banks, we've got headroom available," he said.
"There are challenges, there are labour shortages, there are some delays, and customers need to be patient with all builders, the industry's going through a pretty tough time as many industries are."
Metricon executives met with Victorian government representatives on Thursday morning.
The government is one of Metricon's biggest clients.
Treasurer Tim Pallas said the company told his government "all its trade creditors have been paid in full and on time and Metricon expects this to continue".
"We understand the pressure on builders on the eastern seaboard due to increases in costs, and the impacts this is having on the construction industry and residential clients," he said.
"The government will continue to work constructively with the industry to help address these challenges.
"Metricon is one of several partners in our Big Housing Build delivering high-quality social and affordable homes across the state, and this unprecedented program of work is on track."
Mr Pallas said the company informed the government it was "working constructively with its lender".
He also acknowledged Mr Biasin's death.
"I was shocked and saddened to learn of Mario Biasin's passing," Mr Pallas said.
"On behalf of the government, I extend my condolences to his family and his Metricon colleagues and acknowledge his significant contribution to the construction industry and the state."
Global supply issues, skills shortages affecting industry
Master Builders Victoria's Michaela Lihou said her organisation was optimistic about Metricon's future, but there were issues facing the entire industry.
"The reality of the situation that the whole industry is experiencing at the moment is there's supply shortages, there's skill shortages, there's price increases," she told ABC News Breakfast.
Metricon employs around 2,500 staff and has around 4,000 homes under construction.
Federal Labor met with building industry representatives this morning to discuss the issues facing Metricon.
"What's getting worse, what's really biting for companies like Metricon and others at the moment, is the area of skill shortages," Shadow Housing Minister Jason Clare said.
"Whether it is skilled workers on site or whether it is labourers, this is something that everyone I speak to in this sector is worried about."
The construction sector has been hit by insolvencies due to rising costs associated with global supply constraints.
Iconic firm Grocon collapsed in 2020 and this year mega-builder ProBuild — with its $5 billion pipeline of work — fell over.
Since then, ABD Group, Privium Home, Condev and, most recently, Next, went under.
Equifax data suggests, while the overall rate of insolvencies in March 2022 was up 5 per cent on last year, construction insolvencies were 28 per cent higher.
In the first quarter of the year, compared to the same period in 2021, 270 construction companies filed for insolvency a 21 per cent jump.
