But latest quarterly data shows fewer construction firms in financial crisis over the past three months
The number of construction firms in critical financial distress has almost doubled over the past year, according to the latest data from insolvency specialist Begbies Traynor.
However, there was a fall in the level of companies in distress between the first and second quarters of this year.
The number in significant distress (defined as those with a court action or average, poor, very poor, insolvent or out-of-date accounts) dropped 16% from 22,966 to 19,325, which was the biggest decline across all sectors.
Nick Hood, partner at Begbies Traynor, said: “The sector is not out of the woods. Whilst construction projects commissioned three years ago may still be ongoing, the demand for new buildings cannot continue whilst unemployment continues to rise and credit remains difficult to come by.
“Within the construction sector the lag on any economic recovery is likely to be more pronounced, given how far it sits down the food chain.”
The biggest year-on-year jump in the number of firms in critical distress (companies with court judgments totalling £5,000 or more and/or winding-up petition related actions) was seen in the wholesale sector, with a 185% rise.