Insolvencies expected to rise as data reveals number firms going under is 15% up from last year
Nine construction firms are going bust every day, new figures from Pricewaterhouse Coopers have revealed.
The data showed 829 construction companies entered into insolvency in the first quarter of 2009, up 15% from the same period in 2008.
Commenting on the results, Jonathan Hook, construction and housebuilding leader at PwC said: "Nobody in the industry will be too surprised about these figures as the downturn in workload is being felt across the country. The barriers to entry in some parts of the sector are relatively low and therefore in boom times many new companies performing general construction and trades spring up. We are seeing a natural reversal of this as volume contracts."
He added: “Sadly I expect the insolvency stats to grow during 2009 particularly as the cash unwinding impact of a downturn in volume is experienced - those that aren't planning for that now could get caught out."