A recent study suggests that there has been a 40 per cent increase in the number of UK construction firms facing insolvency in the past 12 months.
Meanwhile, in the past 18 months, the number of businesses operating in this sector that are experiencing financial distress has doubled, the research reveals.
The findings, which recently featured in an article in The Construction Index, suggest that there were a shocking 60,541 construction companies and 115,249 support services companies facing a ‘serious risk’ of collapse in the first quarter (Q1) of 2018 – up significantly on the number of businesses facing financial distress the previous year.
The consensus among commentators is that Brexit uncertainties have been weighing heavily on business confidence over the past few months, and that the recent collapse of construction giant Carillion earlier in the year has had a knock-on effect on confidence all across the construction sector.
Elsewhere, concerns have been raised that an increasing number of construction firms are running into problems with unpaid invoices, as the UK’s so-called late payments crisis continues to take hold.
In light of this, businesses that are facing financial distress of any kind are being advised to seek specialist advice sooner rather than later.