A challenging year for the construction industry saw a 42% increase in administrations in 2023, reaching a total of 363, according to Creditsafe data. While December showed a slight improvement, with 18 firms entering administration – five fewer than the same month in 2022 – the overall trend indicates ongoing difficulties throughout the supply chain. The knock on effect of this being less contracts for scaffolding.
WHP Engineering, one of the December casualties, faced a halving of turnover to £17 million, reporting a loss of £564,200 in 2021. Grant Thornton administrators, appointed on 4 December, cited tight margins, labour shortages, cost inflation, and supply chain insolvencies as contributing factors.
The mechanical and electrical (M&E) sector also witnessed notable collapses, including Oxfordshire-based Quickcharge, specializing in EV charging points. The company succumbed to the global semiconductor shortage and reported a loss of £170,997 in the financial year ending February 2023. Administrators sold Quickcharge and its assets to Quickcharge Holdings Ltd for £250,000.
Norfolk-based FG Fennell & Company and Lowestoft Electrical Group, both M&E sister companies, collapsed with over 40 combined staff. Economic uncertainties and low margins continue to plague the industry, with some economists predicting a Bank of England interest rate cut to stimulate growth. NG Bailey’s CEO, David Hurcomb, highlighted the impact of political uncertainty on project planning, while experts caution that the construction sector faces increased pressure in the coming year due to a combination of factors, including high interest rates, material costs, energy prices, and supply-chain disruptions. The industry braces for a potentially challenging 2024
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