Coronavirus crisis holds 71,000 construction SMEs in distress endangering 124,000 jobs
The latest Business Distress Index from RealBusinessRescue.co.uk has revealed the number of construction SMEs in significant financial distress now stands at 71,000 – a 10% increase since the end Q1 (lockdown), and a 6% increase since Q2 – endangering 124,000 jobs.
The website analysed data from Red Flag Alert and discovered that these construction businesses in significant distress are part of 544,000 SMEs in distress across the nation, with a total of 1.8 million jobs under threat.
In addition to this, RealBusinessRescue.co.uk discovered that the number of construction start-up businesses (born after 2017) in significant distress had soared by 22% in the last quarter due to the pandemic. There are now almost 13,000 of these fledgling businesses in distress – a 47% increase since the start of lockdown when there were 8,500 in distress.
These rapid increases in distress for such small and young companies is worrying when considering that the number of insolvencies in 2019 was just 17,196.
Shaun Barton, National Online Business Operations Director at www.RealBusinessRescue.co.uk , said:
“Both SME and start up construction firms have a vital role to play in rebuilding the economy. So many businesses rely on them both up and down the supply chain. There is a pressing need to keep building in order to make sure that the UK doesn’t fall behind in providing housing for people and better infrastructure for businesses and individuals. The UK construction industry is so often seen as a bellwether for the economy, if we can see it moving again, the rest of the UK may follow.