The construction industry is benefitting from the ongoing economic recovery that appears to be driving increased volumes of building and repair projects across both residential and industrial sectors, according to analysis from Creditsafe.
While its figures show the number of construction companies grew by 5.6% from 203,157 to 214,521 in 2014, additional figures from the Office of National Statistics (ONS) demonstrated that despite a slowdown in house building in the last quarter, output from the construction sector rose by 7.4% – the strongest expansion since 2010.
Creditsafe’s analysis showed that despite the growth in numbers of companies as well as their productivity, there continued to be a high proportion of bad debt in the industry.
The total value of outstanding county court judgements (CCJs) currently held against construction companies is over £31m, while 8,080 construction companies have either outstanding or satisfied CCJs held against them with an average value of some £5,410.
In addition, firms in the sector continue to be late payers with invoices being settled, on average, some 17 days beyond their due date.
Creditsafe operations director Rachel Mainwaring said: “The construction sector is often seen as a bellwether for the economy as a whole as it is driven by demand for more homes and business premises.
“It is encouraging to see growth in both the number of construction companies operating in the UK and in their productivity and annual output. However, as our analysis shows, late payment and bad debt is a big problem and it pays to understand as much as possible about a construction company’s financial health before going to business with them.”
H&V News launched its Time for Change campaign in 2014 to force a parliamentary debate about the issue of placing retention money into trust.
We invite everyone involved in the industry to sign the petition, including individuals, companies and organisations of all descriptions.