Press Room.
Construction Business Failures Fall, But Future Prospects
Remain Uncertain, Warns Grant Thornton
Phil Westerman, Head of Construction at finance and business
advisors, Grant Thornton UK LLP comments on the latest (Q2 2010)
provisional data on administrations in the construction
industry.
Phil Westerman says: "Less business failures in the construction
industry is a sign that the sector is moving in the right direction
despite the fact that the decline is only a marginal 1.1% from Q1
2010. Construction companies still face very difficult conditions
which may worsen if more building projects are adversely affected
following the Coalition Government's Comprehensive Spending Review
due to be published in October.
"It is encouraging to see some signs of recovery in the
construction industry where administrations in the sector have
fallen for more than five consecutive quarters. In addition, many
indicators have pointed to incremental increases in property
prices, which may provide the impetus for some construction
companies to resume developments.
"The UK economy is still quite volatile and public sector cuts
are effecting the confidence of many construction firms, impacting
on the pipeline for future work in the sector and leading to tough
trading conditions which we will expect to see during the next two
quarters of 2010 and beyond."
The Q2 2010 provisional data, issued by the Insolvency Service
shows 86 administrations of construction businesses. This is a 1.1%
fall from the 87 construction company failures in Q1 2010 and a
4.4% decrease from the 90 administrations in Q4 2009. This is also
a 22.5% drop from the 111 businesses that collapsed in the same
period (Q2 2009) last year.
ENDS
For further information, please contact: Stephanie Aneto, Grant
Thornton Press Office: 020 7728 2940. email:
stephanie.aneto@gtuk.com