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Construction administrations fall but sector still faces difficult 2010
08/02/10
Edited by Bob Witham. The number of construction companies going into administration continued to decline in the fourth quarter of 2009, but the industry could still face a spike in insolvencies before business conditions significantly improve.
According to provisional figures from the Insolvency Service, 90 builders went into administration during the fourth quarter of the year, down from 160 business failures in third quarter and 111 in the second quarter.
For 2009 as a whole, there were 427 construction firms place in administration, down 8.8 per cent on 2008.
Phil Westerman, head of construction at chartered accountant Grant Thornton, said although the improvement in insolvencies is welcome, business failures in the sector remain "relatively high" and should be a major concern.
"Even though the UK has officially come out of recession, the construction sector often lags behind others in recovering from a downturn so we may therefore see an increase in business failures before things significantly improve," he added.
Overall, there were 19,077 compulsory and voluntary liquidations in 2009, up 22.8 per cent on the year before.
