The UK’s Construction sector had an underwhelming Q4 2017 with only a 2.26% growth in sales and a 2.28% rise in failed businesses, according to the Creditsafe Watchdog Report. The report tracks quarterly economic developments across construction and 11 other sectors.
The report showed that the number of high risk businesses had increased by 12.15% on the previous quarter, and the number of very low risk firms had seen a drop from 58,261 to 55,734 (4.34%). In addition, companies’ bad debt, the volume owed to the sector, had risen from £9,136,325 to £12,735,137, a 39.39% increase on Q3, despite a fall of 40.41% compared to Q4 2016. However, the number of companies affected by bad debt fell by 14.94%, meaning the average amount owed to each business in the construction sector saw 63.87% increase. Total employment rose by 14.40% from Q3 to Q4, and by 32.21% compared to the start of 2017.
Rachel Mainwaring, Operations Director at Creditsafe, commented: “Figures in today’s Creditsafe Watchdog Report show a worrying future for the Construction sector. Bad debt owed to the sector has significantly increased, which has likely impacted the number of businesses considered high risk and the higher number of failed firms in Q4.”
“These figures are disappointing, as we hoped the sector was on the road to recovery with the previous quarter’s figures indicating a step in the right direction. The construction industry is notorious for suffering with late payments and this report is evidence that more needs to be done to help this sector survive in difficult industry conditions.”