Statistics from the federal government’s Insolvency and Trustee Service can reveal the impact of the global financial crisis upon architectural sole practitioners and small studios.

Analysis by Architecture & Design on the latest annual report reveals that the number of science, building and engineering professionals that have gone bankrupt for business reasons has risen by nearly a third in the past two years.

The group, which includes architects, landscape architects, quantity surveyors and civil engineers, saw 29 per cent more bankruptcies in the year 2008-09 (44 individual cases) when compared with data from 2006-07.

Associate professionals in the science, building and engineering group, which includes architectural associates such as draftpersons, fared worse still, facing a 475 per cent increase (rising from 4 to 19 cases) in the number of bankruptcies over the same time period.

Pracitioners cited economic conditions, credit restrictions, lack of business potential and under-quoting, among the reasons for going bust.

CEO of Master Builders Australia, Wilhelm Harnisch, told Architecture & Design that the statistics needed to be held against the backdrop of a cyclical downturn made worse by the global financial crisis.

He called the statistics “very worrying” but not necessarily surprising, given the economic challenges of the past two years.

“It just shows that a lot of companies are financially vulnerable and testifies to the intensity of the shock saw the end of them,” he said.

The design profession was the “most vulnerable” to an economic crisis because they are at the front end of new projects, Harnisch said.

“The design professions were hardest hit because clients were not commissioning new work and, the feedback I’ve got, is that work literally dried up.”

However, Harnisch did say that there is a lot of “pent up demand”, not only in the residential, but the commercial and non-residential building sectors.

“These people who have been associated with failed entities are unlikely to be long-term unemployed,” he said.??While the government offers some tax relief other assistance programs, bankruptcy is “a feature of the industry”, Harnisch said.

“The reality is that, unfortunately, a lot of the small entities didn’t have robust enough financial backing to withstand what was a huge economic and financial shock.”