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Sat November 28 2020

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Balfour Beatty fears for its subcontractors

5 Nov 13 Britain’s biggest construction firm has warned that its smaller subcontractors could be vulnerable as the economy recovers and the industry’s workload increases.

Balfour Beatty said that its subcontractors were at risk from rising work volumes because their need for more working capital to take on more work put increasing pressure on their balance sheets.

In an interim management statement, Balfour Beatty said that it was having to be “vigilant about cost escalation and the risk of subcontractor failures”.

The company said that its order book remained steady but there was a lack of major infrastructure projects in the UK so it had to chase more small contracts. “The visible pipeline looks weak, and we see little prospect for change in the next couple of years,” the board said. “We therefore anticipate a continuing shift in our business mix away from major infrastructure and into regional work.”

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