As the number of construction firms collapsing in the UK rises, contractors in the industry are being warned to be cautious when taking on new jobs.
The Insolvency Service reported that an average of 266 businesses per month collapsed in the three months to October 2021 which is according to the date is the largest number since before the pandemic and a 29 per cent rise on the previous period.
Miles Grady, Director of Umbrella.co.uk said: “Construction is an important industry for many contractors and umbrella workers. This news will understandably be cause for concern for many of our clients.
“When a construction firm goes bust it can send seismic impacts down supply chains, pushing many sub-contractors towards the brink.
“Contractors deserve better, and they should start taking extra steps to protect themselves.”
While some material prices have fallen in the last few months, the cost of construction materials in the three months to October was more than 20 per cent higher compared with the previous year.
While there has been a high demand for building recently, there have been supply chain issues which have had a knock on effect and increased prices for materials such as timber, steel and cement. Since Brexit, there has also been a lack of skilled workers which has contributed to the business closures.
As a way to protect themselves, contractors have been advised to work through umbrella companies, work with larger construction firms where there is less chance of closing and to negotiate weekly payments and upfront payments.
Author: Steven English
18.02.2022
