Failures are easing but the struggle continues

THERE have been nearly 9,000 construction and manufacturing insolvencies in the past two years, a survey has found.

Although the number of companies going to the wall reduced in the last quarter, the two sectors remain among the worst affected out of all industry areas said financial consultant PwC. And despite the “less aggressive” quarter the two industries combined still generated 1,013 insolvencies between January and March.
Construction saw a 5% fall in its insolvencies from 658 to 625 nationwide in the first quarter of this year. London remains the region with the highest number (103) and over the two-year period has seen 977 insolvency cases over-all.
Of the 5,500 construction insolvencies for two years, 1,488 involved general construction/civil engineering companies and 378 involved architectural firms. 

Regionally, most places saw a decrease apart from North East & Cumbria (up 27.5%) and the North West which went up 14.8%. 

Jonathan Hook, PwC’s engineering & construction leader, said: “Any reduction in the number of insolvencies in the construction sector is welcome. The sector in the UK is still experiencing declining output year on year however, so we are not necessarily over the worst yet in terms of insolvencies. There is an ongoing cash squeeze throughout the supply chain as has been evidenced in recent reported results.
“The measures in the recent budget to support infrastructure, and in particular levels of house-building are welcome but will take a little while to feed through into output.”