Begbies Traynor鈥檚 latest Red Flag Alert says that there was a 17% increase in construction and real estate firms in financial difficulty at the end of last year, reaching 50,122.
Despite numerous industry surveys suggesting that construction is in pretty good shape, accountants at Begbies Traynor take a different view. They say that all sectors of the economy saw an increase in financial distress over the past 12 months, and construction is no different.
Partner Julie Palmer said: 鈥淒espite an improving economy, 2015 showed no shortage of challenges for UK businesses, with a slowdown in China and collapsing oil and commodity prices leading to stock market turmoil during the second half of the year. At the same time, manufacturing weakened significantly as a result of continued sluggish growth in Europe, while labour shortages and building materials inflation continued to plague the construction sector.
鈥淲ith聽 so many聽 companies聽 beginning聽 the聽 New聽 Year聽 in an聽 unfavourable聽 financial聽 state聽 and聽 even聽 the chancellor predicting black clouds on the horizon, 2016 looks set to be another challenging 12 months for UK corporates.鈥�
Executive chairman Ric Traynor was equally gloomy: 鈥淪truggling businesses should not expect any respite in 2016, with the UK economy facing greater headwinds this year from slow global growth, lower levels of business investment and the highest levels of consumer debt seen for five years. Meanwhile the looming EU referendum, potential interest rate rises, and additional cost pressures, including the introduction of the new national living wage in April, give cause to yet more uncertainty for UK businesses over the coming months.鈥�
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