Large builders start showing the strain

Published:  08 August, 2012

LONDON: Business liquidations in construction jumped 12% when those is all other sectors fell according to quartely figut\res from the Insolvency Service.

Construction companies now make up nearly a quarter of all firms forced into compulsory liquidation.

Alan Harris, director at specialist construction risk management firm, CR Management said: "The construction industry continues to jog along the rough and uneven road to recovery which now looks to be a long way off.

"As a consequence a number of main contractors that we are working with are looking again at their structures with a view to making further efficiency cuts in order to compete in the current and projected market and more will follow suit, although for some they will have left it too late

"Over the past quarter it has been noticeable that the companies becoming insolvent are of a larger size and hence are having a greater impact on the market.

"In particular a number of mechanical and electrical contractors have ceased trading putting increasing pressure on main contractors to find replacement subcontractors who will guarantee the original work.

"This also puts increasing pressure on programme times leading to the possibility of projects falling behind and all of the cost ramifications this carries."

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