Around eight building companies a day are going bust, according to leading insolvency practioners.
The latest data from accountancy firm PriceWaterhouseCoopers show that insolvencies amongst the construction industry have risen 40% in a year.
According to the firm, some 692 construction firms were declared insolvent in the last quarter of 2008 – up from 540 the previous quarter – and taking the total to 2,100 for the whole of 2008.
PwC’s construction and housebuilding leader, Jonathan Cook said he expects the numbers to deteriorate further in 2009.
“It doesn’t come as a major surprise. The impact is across the sector. Even those contractors who are currently cash-rich need to be alert to the unwinding of cash flows on major projects and in particular the risk of financial failure in their supply chain.”