More than a quarter (29 per cent) of construction companies in the South East are at risk of failure in the next 12 months, according to research by R3, the insolvency trade body using the Bureau van Dijk ‘Fame’ database.
This figure is higher than the regional cross-sector average of 25% of businesses at risk of failure, but it in line with the national picture as 29 per cent of construction firms in the UK are also categorised as ‘at risk of failure’.
Nick Keitley, Chairman of R3’s Southern Committee and Partner at Bond Pearce in Southampton, comments: “Construction companies are struggling and a lack of funding for schemes is perhaps one of the key contributing factors for smaller firms.
“The housebuilding market isn’t recovering as quickly as many would have anticipated and while there are several residential schemes in the pipeline in the South East, firms are understandably cautious until concrete evidence is in place that they will materialise.”
Nick’s comments reflect further research by the State of Trade Survey from the Federation of Master Builders, which reveals that four out of 10 small companies in the construction industry say their businesses are still suffering from the slump in the housebuilding market.
However, Nick adds that there are hopes for construction companies in the South East, particularly with the news that plans are afoot to build a £2bn theme park in North Kent. Similarly, he adds that the £150m construction of a new berth at Southampton’s container terminal could provide a real boost to construction firms in the west of the region.
