Construction Firms Face Difficult 2010

2010 is promising to be yet another tough year for the UK firms despite economic recovery with construction firms said to be the most vulnerable.  This is due to the expected end of the HMRCs ‘time to pay’ support scheme.

This comes according to insolvency company Begbies Traynor, who have said that the construction and public sector are most at risk and have also said that companies are ill prepared and don’t have the necessary finance available for the expected upswing in business.  Along with the withdrawal of government support measures, this may affect firms ability to cope.

Begbies’ ‘Red Flag Alert’ has reported its first year on year decline in the fourth quarter of 2009 after the number of companies with critical financial problems fell by 14% compared to Q4 in 2008.  Despite this, they are expecting a ‘significant relapse’ in the third quarter of this year as companies face the recovery.

The final quarter of 2009 saw over 140,000 companies falling into financial difficulty and the Red Flag Alert showed this was an increase of 6% on the third quarter.

“With tax and interest rates certain to rise, as well as increasing pressure on consumer spending, there is every reason to suggest that the insolvency peaks of this recession remain some way off,” said Ric Traynor, executive chairman.

Posted at 10:26AM Feb 09, 2010 by Marc Stenton in Insolvency  |  Comments[0]