Hard hit property and construction sectors saw 117 firms fall into administration in last quarter
The number of property and construction companies falling into administration during the third quarter of 2011 was 11% higher than at the same time last year.
Research by business advisory firm Deloitte showed that 117 firms were affected in the past three months, up from 105 in Q3 of 2010.
Nigel Shilton, real estate industry partner at Deloitte, said: “Rising energy prices and significant cuts to public and private sector building projects have brought a large amount of planned projects to a grinding halt. The next quarter is going to continue to be tough for the construction sector and will particularly hit medium sized firms as opposed to the larger national contractors.”
Shilton said the property market continues remained flat, reflecting current concerns around unemployment and declining incomes.
He said: “We are already seeing sentiment turning and property yields falling off which is being evidenced by deals either not completing or ‘price chipping’ by purchasers before they commit to complete. Therefore, I am afraid the next quarter is not going to bring any relief from the pressures that property and construction companies are currently facing.”