Analysis by accountancy firm KPMG shows that the number of firms in the building & construction sector falling into administration jumped to 76 in the third quarter of 2019 (June to September), up from 49 in the second quarter.
High profile failures during the period included Pochin’s, which fell into administration on 5th August. (Unsecured creditors are set to get just 4p of every pound they are owed.)
The property sector also saw a rise in insolvencies, from 18 in Q2 to 33 in the third quarter.
Blair Nimmo, head of restructuring for KPMG UK, said the outlook was bleak. “The building and construction sector continues to feel the strain of the ongoing economic uncertainty across the UK, with a softening in activity and delays in investment for large construction projects. Indeed, there has been pressure throughout the whole supply chain, not least due to high input prices, all of which has resulted in a spike in the number of insolvencies,” he said.
“Add to this, reducing credit insurance appetite, the declining availability of skilled labour and limited options to refinance and raise funding, and it’s clear to see that pressure in the sector is only likely to increase. Recent PMI data - which recorded five consecutive months of contraction - tells us that unless clarity and confidence returns to the sector, financial distress and increasing numbers of insolvencies are likely to prevail.”