The number of construction companies going into administration remains close to 30 per cent higher than the end of last year.
Figures released by the Insolvency Service show that in the second quarter of 2008 a total of 99 construction companies working in the installation, completion and site preparation sectors had to call in the administrator - 10 below the previous quarter.
David Merrygold corporate recovery partner at PKF Accountants and Business Advisors, was joint administrator when Ipswich based Warners M&E went into administration in March.
He said the general economic climate remained glum: “The construction industry is really feeling the pinch at the moment. My advice to anyone experiencing difficulties is to speak to an insolvency practitioner as quickly as possible.”
The overall figures for the UK showed a sharp increase of 60.3 per cent in the number of companies going into administration taking the figure up to 938 compared to 585 in the same quarter last year.
There were also 3,560 compulsory liquidations and creditor's voluntary liquidations (CVLs) in total in England and Wales in the second quarter of 2008. This was an increase of 11.6 per cent on the previous quarter and an increase of 15 per cent on the same period a year ago.
Mr Merrygold emphasised that despite the credit squeeze action could be taken to avoid going into liquidation: “With the right advice they could be sold off and continue to trade. However, there is no doubt the consequences of a downturn in sales are having an effect on cash flow.
“Managing Directors whose companies are feeling this pressure need to be talking sooner rather than later to their insolvency advisers in order to protect the viability of their company’s future.”
Mr Merrygold also raises concerns about the 24,553 personal bankruptcies seen in the last quarter: “Although the figures are lower than the previous quarter, you are looking at over 100,000 individuals in a year being made bankrupt or subject to an individual voluntary arrangement. This is an unacceptable level of personal insolvencies.”