17,000 contractors in financial trouble

Grant Prior 14 years ago
Share

The number of construction companies in dire financial straits fell during the last quarter but figures show more than 17,000 firms are struggling.

Figures from the latest Red Flag update by accountant Begbies Traynor show the  number  of  construction  companies  experiencing  ‘significant’  or  ‘critical’  financial  problems  fell  by  17%  in  the  second  quarter  of  2010  to  17,033  compared  to last year.

But experts at the firm are warning that any recovery could be derailed by planned public spending cuts.

Firms are classed as being in trouble if they are facing CCJs worth more than £5,000, a winding-up petition or have insolvent or out of date accounts.

The survey warns that construction is coming out of recession slower than other industries and that the latest figures are still historically high compared to 13,718 firms in trouble during the second quarter of 2008.

Nick Hood, Partner of Begbies Traynor, said:“We  have  already  seen  the  value  of  new  contracts  tendered  fall  by  40%  between  the  first  and  second  quarter  of  this  year  and  the  public  sector  spending  cuts  are  yet  to  fully  impact  the  industry.

“The cuts announced this week to the BSF programme will  hit  contractors  hard.

“This  follows  major  infrastructure  and  hospital  project  cancellations  and deferrals  totalling  over  £10bn  announced  shortly  after  the  new  government  took  office and the station  refurbishment cutbacks by Network Rail.

“There  is  a  growing  risk  that,  even  if  the  UK  avoids  a  potential  double‐dip  recession,  it  could develop  a  twin  track  economy,  with  public‐sector  dependent  industries  such  as  construction  facing  higher  levels  of  financial  distress  than  sectors  which  are less  directly  linked  to  government  spending  cuts.

“Builders are likely to be hardest hit of all.”

Latest news

Beck Interiors files administration notice

Supply chain has suffered delayed payments from £139m-turnover luxury fit out specialist
5 hours ago

Green light for York Central civil service office hub

£60m office project accelerates York Central goods yard redevelopment
2 hours ago

Blenheim House Construction enters administration

Administrators looking at options on present projects
18 hours ago

Profits rise at Esh Group with more to come

Contractor confident about year ahead as market conditions move in right direction
5 hours ago

Piling specialist Van Elle sees housing orders rise 30%

Mark Cutler says firm on course to deliver 10% annual sales growth
5 hours ago

HS2 to spend £100m shutting sites where work never started

Remediation of sites no longer needed for cancelled Phase 2 will take three years
22 hours ago

Willmott Dixon wins £61m deal for new Army dog unit

Contractor to revamp Kendrew Barracks in Rutland
5 hours ago

Stockport advances 4,000-home Town Centre East plan

Council seeks consultants to steer plan for 280-acre area in the city
6 hours ago

ISG sale imminent as buyers set-up UK holding company

South African nutrition entrepreneur and Australian partner primed to take over
1 day ago

CR Construction wins £210m Manchester towers

Construction to start next year on four blocks ranging from nine to 34-storeys
1 day ago

Southern Housing to rationalise supply chain following merger

Firms put on alert for £1.7bn construction framework renewal
1 day ago

Decision delayed on 52-storey Isle of Dogs tower

Hong Kong developer plans 460 flats block next to Millwall Inner Dock
1 day ago

Go-ahead for £850m North London estate rebuild

Flagship Edmonton housing estate redevelopment will deliver 2,000 new homes
1 day ago

Mace lands £184m Oxford Science Park contract

Contractor to build trio of laboratory and office buildings
2 days ago

Worker paralysed in 30ft fall during electricity pylon demolition

Specialist firm fined £240,000 after court hears linesman attached lanyard to a loosened steel section
1 day ago

Sir Robert McAlpine clinches £4bn Somerset gigafactory

2.6m sq ft car battery plant will require over 2,000 workers at peak construction
2 days ago

House builder Hill Group tops £1bn turnover

Group's controlled development pipeline stands at £10bn
2 days ago

Higgins wins 360 new homes job in south London

Firm will now work up planning for phase 2 of Brixton housing project
2 days ago

Kier starts £48m Ealing high school job

Northolt High School to be rebuilt for 1,130 pupils
2 days ago

Plans in for £64m Suffolk A12 upgrade

Work to start next summer on dualling and junction upgrades
2 days ago

Man suffers multiple fractures in HS2 accident

Engineering firm fined after fall leaves worker in hospital for two months
2 days ago

Go-ahead for Milton Keynes’ largest private rental project

Platform_ to build 20-storey scheme of 335 flat next to train station
5 days ago

A2Dominion reins in new-build and cuts development team

Housing association to stop private new build sales in big strategy switch
5 days ago

Sellafield partnership appoints final key delivery partners

Altrad and Kaefer bag £180m access, insulation and painting deal
5 days ago

Health centre canned as build costs double in four years

Devon NHS stands down plans for Health and Wellbeing Centre in Teignmouth
5 days ago

Family confirm death of Des O’Rourke

Deputy chair and co-founder of Laing O'Rourke dies aged 75
6 days ago

Plans approved for major phase of £2.5bn Salford Crescent

Crescent Innovation will help create global research hub
5 days ago

Deal to kick-start 3,000-home Northstowe town centre

Labour Government acts to unlock next phase of new town near Cambridge
6 days ago

Striking new-look for Canary Wharf HSBC tower

Large chunks of upper floorplate to be removed in major overhaul
6 days ago

Kier halves debt to £115m after strong trading year

Order book up 7% to £10.8bn with 85% of work secured for year ahead
6 days ago

Contractor services