Ongoing political and economic uncertainty has been a major factor in a 55% surge in the number of building and construction sector insolvencies during Q3, according to new analysis by KPMG, which saw a marked increase in administrations, up from 49 in Q2 to 76 in Q3 2019.
Blair Nimmo, head of restructuring for KPMG UK, said: “The building and construction sector continues to feel the strain of the ongoing economic uncertainty across the UK, with a softening in activity and delays in investment for large construction projects. Indeed, there has been pressure throughout the whole supply chain, not least due to high input prices, all of which has resulted in a spike in the number of insolvencies.
“Add to this, reducing credit insurance appetite, the declining availability of skilled labour and limited options to refinance and raise funding, and it’s clear to see that pressure in the sector is only likely to increase. Recent PMI data, which recorded five consecutive months of contraction, tells us that unless clarity and confidence returns to the sector, financial distress and increasing numbers of insolvencies are likely to prevail.”