More businesses in the construction sector, already under pressure from stretched supply chains and labour shortages, are expected to go to the wall as the cost of materials and wages exceed manageable levels.

According to credit reporting agency CreditorWatch, the construction sector currently has the worst late payment of any industry with one in 10 builders more than 60 days in arrears on their payment to suppliers.

CreditorWatch chief economist Anneke Thompson said further pain would be inflicted upon construction firms by increases to the cash rate target in order to bring inflation back within the target band of 2 per cent to 3 per cent.