Construction companies facing insolvency

Source: Construction Digital

Date :30/04/2008 14:33:51

More than 500 construction companies could face bankruptcy, according to figures from Begbies Traynor.

There has been a significant rise in the number of companies suffering critical problems during the first quarter of this year. Retail and construction sectors are the most affected, with increasing numbers of companies going into administration, liquidation, receivership or seeking voluntary arrangements.

The number of construction companies showing signs of bankruptcy is more than double the number twelve months ago.

Outlook

PricewaterhouseCoopers has reported that 3,359 companies failed across the country in the first three months of 2008. The number of companies entering insolvency is at its highest level in five years. This stands as a 21 percent increase on the previous quarter and a 17 percent increase for the same period last year.

Over 3,000 companies have had county court judgements awarded against them this year, reports Begbies Traynor. They forecast that about 20 percent of these firms will face insolvency over the next twelve months.

The ‘credit crunch’ is being blamed for the difficult circumstances, with Experian claiming that extra expense and difficulty borrowing has been the main cause of failing businesses.

April 30, 2008