Alarm raised as specialist contractors start to topple

Aaron Morby 12 years ago

A sudden spate of specialist contractor collapses has raised the alarm that many well-established firms are teetering on the brink.

In just over a week, six specialist package and trade contractors have been placed in administration, half from the building services side of the industry.

The failures highlight the parlous state of specialist sector, which is the life blood of the industry.

Recent specialist contractor failures

  • Essex-based M&E specialist Regency Building Services (Est 1987)
  • Sutton Coldfield electrical contractor Hulse (Est 1985)
  • London ductwork specialist FCS Ductwork (Est 1994)
  • Staffordshire cladding specialist Parry Bowen (Est 1979)
  • London based HSE Building Services
  • Hampshire-based ductwork contractor WML
  • Manchester-based roofing and cladding specialist Richmond Cladding Services (Est 1989)
  • Northumberland suspended ceiling and dry lining specialist Classic Excel (Est 1983)
  • Derby steelwork contractor Robinson & Sons (Est 1950s)
  • London scaffolding contractor Hadley Southern (Est 1997)

Suzannah Nichol, chief executive of the National Specialist Contractors Council, said: “These company failures highlight just how hard it is for specialist businesses at the moment.

“Specialist contractors have been battling with a tough market since 2007 when the banking crisis hit.”

She warned: “These are not new businesses being hit, it is firms that have been trading for 20 or more years.”

The black week for specialists started when the president of the National Specialist Contractor Council’s own dry-lining firm, Classic Excel, went under.

Since then a succession of other contracting businesses, mostly handling the later phases of building have collapsed.

Industry commentator Brian Green of research body Brickonomics said: “When the industry started to collapse in the financial crisis, it was buoyed by bringing forward public spending and the stimulus of falling interest rates.

“That provided the illusion things were getting better. Despite that the spread of suicidal bidding has continued.

“Now what we are seeing is the result of this destroying firms’ balance sheets and prospects of future profits against a declining construction market.

“It seems the banks are drawing a line under exposing themselves to further risks with already weakened firms as prospects for the economy worsen,” he warned.

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