More building and construction firms are destined to fail following the voluntary administration of Arrow International, an economist says.
"You are going to see more failures within that sector, we haven't seen the last of it," said Cameron Bagrie, an independent economist based in Wellington.
"What you have at the moment is a nasty combination where the sector is basically maxed out capacity wise, access to credit is becoming an issue because the banks are looking at everything closer, and costs keep moving up.
"And if you look at some pockets of the market, particularly up in Auckland, residential property prices are falling."
There were also specific issues relating to contracts and who bears the risk, while many projects have become uneconomic, he said.
Arrow was placed in voluntary administration after a contractual dispute left it with insufficient cashflow to meet operating costs.
BDO partners Andrew Bethell, Andrew McKay and Colin Gower were appointed joint administrators.
It's understood Arrow had earlier been on the losing end of a $4.2m dispute with subcontractor March Construction, a Christchurch-based company now owned by France-based Vinci Construction.