RATINGS IMPROVE TRANSPARENCY

The construction industry has been assailed from all angles in recent years, with supply chain constraints, labour shortages and increasing costs pushing many beyond the brink.

One-in-four companies that have entered administration since July 1, 2022 have been construction companies, almost twice the rate of the next most affected industry.

The one shining light for companies who have weathered those challenges has been the healthy pipeline of work stemming from low interest rates and Government-fuelled incentives.

But the good times are drying up.

Data from the Australian Bureau of Statistics show that in May, dwelling approvals were trending down in the ACT (-32.7%), Queensland (-7.6%) and Victoria (-3.9%).

Cost of living pressures are undoubtedly a factor in projects being put aside but there is also hesitation from customers, unwilling to risk seemingly sound building companies going under.

In response, Equifax, an independent regulated ratings agency, developed iCIRT to improve trust, transparency, and ultimately bring back confidence to the construction industry.

iCIRT provides a business with a star rating, with five gold stars being the highest rating available. A business with three gold stars and above is classified

“The methodology centres around six key criteria: Character, Capability, Conduct, Capacity, Capital and Counterparties. We are seeking to understand those businesses that have the capacity, capability, resilience and reliability to deliver good quality built assets,” she said.

Exploring the benefits

Building professionals that secure an iCIRT three gold star or above rating demonstrate strong foundations to financiers, and may also gain a benefit from an insurance perspective, reducing pressure on costs.

There are also benefits for consumers.

When looking to purchase a new home or investment property, buyers often have limited information on which to base decisions. By choosing an iCIRT-rated player, there is greater certainty that they are transacting with reliable and resilient constructors with a track record of doing the right thing.

“The introduction of a star rating system into the residential construction industry aims to give certainty around one of life’s biggest purchase decisions,” Ms Shaw said.

“iCIRT provides prospective buyers with a path to start their journey, comfortable in the knowledge that they will be working with a trustworthy builder or developer that has been listed on the register.