The battle construction companies were facing in 2022.

The number of construction companies in ‘critical distress’ rose significantly throughout 2022. Why?

With cost inflation and economic uncertainty hitting levels higher than ever before, it’s no surprise that businesses are struggling to cope and are doing whatever they can to stay afloat.

After a report from business recovery specialist Begbies Traynor, it has come to light that 632 firms in the construction sector had county court judgements declaring they owed more than £5,000 each at the end of 2022. This number was up from 561 businesses three months earlier and 467 in the fourth quarter of 2021.

‘It is estimated that a further 77,000 businesses in the sector were classified as being in “significant financial distress” at the end of 2022’.

DANIEL JAMES INTERIORS

It is also estimated that a further 77,000 businesses in the sector were classified as being in “significant financial distress” at the end of 2022. Now, as we know, material costs, labour costs, and near enough every cost we currently have to live with has skyrocketed.

There’s no surprise that businesses are struggling, and with a lot of these businesses staying a float by cash flow, late payments can quickly turn from a problem to a crisis, says Begbies Traynor partner Julia Palmer.