The fall in construction output in January unfortunately does not come as a surprise, according to a committee of insolvency professionals in the South East.
Research by R3, the national trade body for insolvency professionals, shows over a quarter (29%) of construction firms across the South East are at risk of failure in the next 12 months. This figure compares to 22% of businesses at risk in the South East overall. R3 figures show that some 9,935 construction and civil engineering companies registered in the South East are at risk of collapse.
The percentage of construction firms at risk in the South East is slightly higher than the national average of 27%.
James Stares, Southern Regional Chairman of R3 and a Director at Grant Thornton in Southampton, comments:
“Difficulties in raising funding for development, together with the cuts in public spending, are both key issues facing the industry. Due to public sector contracts drying up it is understandable the construction sector is struggling. The ‘crane count’ in towns in cities clearly indicates the fall in activity and there is little relief in sight.
“In addition, commercial developers are finding it extremely difficult to raise funds and can often only do so on the back of an anchor tenant. However, there is some comfort for smaller builders as the ‘skip count’ indicates that home owners are choosing to upgrade their properties rather than sell up and move in the current market.”
