Scottish construction bankruptcies down by a fifth

LATEST figures from the UK Insolvency Service show the number of Scottish construction companies forced into compulsory liquidation fell from 727 during 2013 to 578 during 2014.

That is a year-on-year reduction of 20% and 58% fewer bankruptcies than were recorded in 2009 when a total of 1,366 Scottish building companies were forced out of business.

Separate ONS figures published back in October showed a slight increase in the number of companies operating in the Scottish construction industry during 2014. But while the number of small businesses operating in the sector (those employing fewer than 10 people) rose by 280 to 15,620, those figures also showed that the number of medium-sized companies operating in the sector was 25% lower than in 2009 while the number of larger Scottish construction companies (those employing more than 250 people) had also dropped from 35 in 2009 to 25 in 2014.

Scottish Building Federation Managing Director Vaughan Hart said, “It is welcome news that the number of construction companies entering compulsory liquidation in 2014 fell for a third consecutive year. This trend is further evidence of the tentative recovery being experienced in the industry at this time. Contemporaneously, there are growing signs of fragmentation within the industry. There are still significantly fewer medium-sized and large companies operating within the sector than prior to the recession. Conversely, we’re seeing a steady increase in the number of small businesses operating within the Scottish construction industry.

“Rebuilding the industry’s skills base remains a critical priority. These trends suggest we need to continue to support the smaller firms with the necessary investment to encourage the recruitment and training of apprentices. That way we can keep the industry’s recovery on a stable long-term path.”