Like the rest of the Australian economy, the construction industry was getting back on its feet after the worst of the pandemic. But the sector has now been hit by a perfect storm of supply chain disruptions, cost blowouts and staff shortages as inflation and interest rates rise.Many of these forces, particularly cost increases, are beyond the control of construction companies. But construction also has major industry-specific challenges. Construction has the worst late payment record of any industry. About 12 per cent of construction businesses are more than 60 days in arrears on their payment to suppliers. Fixed-term contracts are also placing cost pressure on contractors.The risk is that construction collapses cascade down, creating a chain reaction of failed businesses. That could have a serious impact on Australia’s economic recovery.In this episode of Business Insights, Patrick Coghlan, CreditorWatch CEO; Anneke Thompson, CreditorWatch Chief Economist; James O'Donnell, CreditorWatch Data Analyst and Ginette Muller Director of GM Advisory discuss the findings from our 'Cracks in the Foundation' construction white paper and the outlook for the industry for the remainder of 2022.