– It is incredibly sad, says Tor Harald Nævdal. His great-grandfather founded the construction company JH Nævdal Bygg AS in Bergen in 1884. 140 years and three generations later, great-grandsons and directors had to bankrupt the company last week. – It has become more difficult to run this type of company, says Nævdal. The large company has turned over a total of NOK 2-300 million annually in recent years. Now around 84 employees have to find something new to do. Bygg.no mentioned the case first. Tor Harald Nævdal at the warehouse of the bankruptcy framework JH Nævdal. Photo: Silje Rognsvåg / news Bigger companies struggle now Large debts and almost equally large sums outstanding with others are one of the reasons for bankruptcy. – The bank said no to loans, and various solutions did not work either. Then you are forced to shut down, otherwise you can have other problems, explains Nævdal. Unrest in the world, sharp interest rate increases and price increases for building materials in recent years have not contributed in the right direction. – There are many factors and complicated causal relationships. I don’t want to go into everything, says Nævdal to news. Large parts of the construction industry have struggled for a long time. Now the trend is that increasingly large companies have to shut down operations. – That makes the bankruptcies more serious, says chief economist Øystein Dørum at NHO. He thinks we have to go back 35 years in time to see something similar. – Now there is a serious crisis for large parts of the construction industry, especially those aimed at residential buildings and cabins. More people employed per bankruptcy Let’s dive a little deeper into the statistics. The graph below shows that the number of bankruptcies in the construction industry is fairly stable. At the same time, the number of employees who are affected by bankruptcies is increasing. In addition, the graph below shows that the volume of turnover in bankrupt companies has increased in recent years. – Talk about employees who are affected and the level of turnover is higher than before. The average company that is now going out of business is larger than usual. This means that the bankruptcies are more serious, because it is larger companies and more employees who are affected, says Dørum. Great pessimism in the industry Pessimism is great in the construction industry now, shows the latest member survey for NHO. – It corresponds well with the fact that new construction activity has more than halved, and has remained weak for just over a year, says Dørum. He highlights three points as reasons for the pessimism: Prices for essential materials that are bought from abroad are much more expensive, due to increased costs and a weak krone. Wage growth is the highest in approximately 15 years. The demand for buildings has decreased. Chief financial officer Øystein Dørum at NHO believes there is a serious crisis in parts of the construction industry now. Photo: Ole Berg-Rusten / NTB Liability for house of cards effect The trustee for the Nævdal bankruptcy, Egil Horstad, confirms the trend. – I know that picture well. Before it was small companies, now we have seen a number of larger bankruptcies, says Horstad. He is now facing his third bankruptcy in a major construction company in two years. Last autumn, Vestafjell went bankrupt, and in 2022 Vest Norsk Bygg ceased operations. – It is dramatic and happened quite quickly, says the bus driver about the Nævdal bankruptcy. He points out that large bankruptcies can quickly lead to a house of cards effect, where subcontractors who do not get their money must also file for bankruptcy. – When slightly larger players topple, it quickly has ripple effects. It’s a bit scary, says Horstad. On the positive side, he believes that the number of assignments is increasing a little at the moment, even if he has given up hope of transferring the business to Nævdal. – The impression is that it may have loosened a little, says Bustyar. A similar crisis for a long time Tor Harald Nævdal has to go back to his youth to come up with a similar crisis in the industry. In the 80s and 90s, his father had to manage the construction company through the economic crisis. Nævdal is now working to reduce the negative consequences of the bankruptcy for the legacy of his great-grandfather. – I try to help bus drivers, customers, employees and housing projects that have stalled. He says that several companies are interested in taking over the construction project for the bankrupt and employing more of those who have lost their jobs. – In the 80s and 90s it was a completely different situation, there was no work. We have never lacked work in recent years, rather there has been too much, says Nævdal. Former chairman Tor Harald Nævdal in an almost empty office space. Now he tries to help former customers and hire as best he can. Photo: Silje Rognsvåg / news Could affect 100 apartments According to BT, the bankruptcy could have consequences for close to 100 apartments, but bus operators and Nævdal themselves believe the number is lower. Most critical in the short term will be for around 50 apartments at Siljustøl in Bergen. People would like to have moved into around half of them before Christmas. – It is uncertain how many delays there will be. We hope that it will work out, says Nævdal. Around 50 apartments in these two buildings on Siljustøl in Bergen are pending after the bankruptcy. Former employees from the left, Åge Skaflestad and Bjarne Hove, hope to continue working at the site under a new employer. Photo: Silje Rognsvåg / news The construction site is completely empty when news visits the site. Two who lost their jobs in the bankruptcy are on site to inspect the situation. Now they are in the process of getting new jobs. Ideally, they would like to continue working on the Siljustøl project under a new employer. – It’s not just about taking it over there. There are many details on the facade, for example, says Åge Skaflestad. Still optimistic The former chairman of JH Nævdal has been with the company for 42 years, and would like to be there until he retires. It has not completely sunk in for him and former colleague and carpenter Bjarne Hove that the job is gone. – There are many possibilities that have opened up. The impression is that there is a lot of work to be had and room for many permanent appointments, says Hove. He is also optimistic about the future in the construction industry. – A year or two from now, I think there will be a lot more activity in the industry, says Hove. Published 13.11.2024, at 13.04
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– Serious crisis in the construction industry – news Vestland
