A whopping 30% of this year’s business failures set to occur within construction industry
The construction and real estate sectors are the most vulnerable within the current economic downturn, with construction set to account for 30% of all 2009 business failures, according to a report by BDO Stoy Hayward.
The accountants’ Industry Watch report reveals that only 17% of all failures were in the construction sector in 2007.
3.2% of all businesses in the construction and real estate sectors (10 300 businesses in total) are predicted to fail in 2009.
The overall number of UK businesses that are expected to fail in 2009 will increase to 36 000, which equates to one in every 56 businesses.
Shay Bannon, head of business restructuring at BDO Stoy Hayward, said: “The deteriorating economy and expectations of a drawn-out recession has led to a downward revision in the UK outlook and has severely impacted the survival rate of UK businesses.
“Business failures are set to worsen before any improvement is seen. UK companies however are tightening their belts and taking more measures to adapt to the downturn. The Government is also increasing its initiatives to kick start the economy and both should have an effect on a glimmer of light eventually being seen at the end of a very long tunnel. However, because of the uncertainty among businesses on how long it will take for an upturn to emerge and lead to a more positive impact on their business, for some, surviving tomorrow, will not be possible.”
Electrical and Mechanical Contractor