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Liquidations of construction companies.

Written by  Dr Johan Snyman
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Liquidations of construction companies. Liquidations of construction companies.

These data include both voluntary and compulsory liquidations of construction companies during the period 1962 to 2011.

The accompanying graph has shaded areas that represent the upswing phases in the overall business cycle.

Observe that, in most cases, the numbers of liquidations drop during growth periods and rise during economic recessions.

However, as liquidations can take a while to be wound up, the numbers even rise during the early part of a growth phase in certain instances.  In such cases they lag the cycle.

The drop in liquidations in 2011, compared to 2010, suggests that the worst is over for construction companies still hamstrung by the low level of building demand.  This finding comports with rising building costs as competition in tendering eases.

Dr Johan Snyman

Dr Johan Snyman

Johan Snyman obtained his BComm and MComm in Economics at the University of Stellenbosch, and complete his doctorate at the University of Cape Town.  He spent 8 years working as an economist at the Bureau for Economic Research, University of Stellenbosch and then established a private consulting firm, becoming Director of Medium-Term Forecasting Associates, a company specializing in research into building cycles and building costs.

In 2007 he was appointed Adjunct Professor in the Department of Construction Economics and Management at the University of Cape Twon.