Construction is the ‘most worrying’ sector for NAB
National Australia Bank says it is watching the property sector closely after high-profile collapses in the construction industry but is yet to see any deterioration in the quality of its loans.
After record business lending in March, chief executive Ross McEwan said the construction industry was particularly vulnerable to insolvencies given supply chain difficulties, high labour costs and rising input costs for steel and timber with fixed price contracts.
“It’s certainly one of the sectors that we are keeping a close eye on very recently,” Mr McEwan told The Australian Financial Review Banking Summit on Tuesday.“
A lot of them have been having some difficulties there so that is, as a sector, the most worrying part of our book when we look across it. We are yet to see that the economy is having difficulty … but as interest rates start to rise, we have to be conscious that there will be some customers who may have some difficulties.”
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