Construction insolvencies top the 10 000 mark
Published: 12 October, 2012
UK: There have been 10 172 insolvencies in construction and manufacturing since Q3 2010, according to figures issued today by PwC.
In Q3 of 2012 (July to September) there were 4% fewer insolvencies in construction than the previous quarter and Q2 was nearly 16% better than Q1.
Despite this, construction and manufacturing remain one of the worst sectors across the board to suffer from insolvencies.
Jonathan Hook, PwC's engineering and construction leader, said: "While there has been a decline in the number of insolvencies over the last two quarters, the industry remains under severe pricing and cashflow pressure. I anticipate further failures in the supply chain over the winter period, with the first quarter of next year being the peak point for failures in the sector."
Of the 6179 construction insolvencies since Q3 2010, 1799 (approx 30%) were general construction and civil engineering firms, with the remainder made up of architectural, building, water projects, painting, roofing and plastering.
Manufacturing over two years has seen nearly 4000 insolvencies but Q3 saw 9.3% fewer than Q2. Of the 3993 manufacturing insolvencies in the UK since Q3 2010, 1142 have been from industrial manufacturing with the remainder including aerospace and defence, automotive, chemicals, metals and parts of transport and logistics.
Philip Hines, PwC deals and industrial products partner, said: "The reduction in manufacturing insolvencies is encouraging, but with rising raw material costs and no imminent signs of a material economic recovery, the outlook remains tough for those companies already experiencing financial stress."
Overall, the number of insolvencies in Q3 2012 across all industry sectors, fell 18% compared with the last quarter, with only the transport sector seeing a quarterly increase.
There were 3296 incidences of insolvency across the UK in Q3 2012 compared to 4045 in Q3 2011 resulting in a 19% decrease.
PwC experts said the slight reprieve in figures may not signal a long-term improvement. The same pressures may continue through to 2013.