Major builder goes into voluntary administration

Major Queensland building company LDC has become the latest in the field to enter voluntary administration, with creditors owed more than $7 million.

The home builder went into liquidation on Friday.

The construction industry has been rocked by a number of company collapses in recent months, with a skills shortage, high materiel costs and a limited workforce all hitting hard.

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Russ Stephens from the Association of Professional Builders said there was another factor to point to.

"The reason we're seeing this continue to happen is a direct consequence of building companies being allowed to sign up three, four, or in the case of LDC, five times the amount of contracts they would normally sign in a year," Stephens told Today.

"Those contracts were all fixed price contracts which resulted in those building companies losing significant amounts of money over the past two years."

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Stephens said he understood that 48 building sites in Brisbane would be affected by the shutdown, but that it could have been "a lot worse.

"LDC haven't signed a building contract since June last year," he said.

"Had they continued signing contracts, then we would be in a much worse situation."

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Stephens called for more "visibility" on the financial situations of building companies, along with compulsory financial education for builders.

"These companies are dealing with huge sums of money on razor thin profit margins," he said.

"So it's critical that they fully understand their financials if they're going to operate a building company."

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