On the back of the latest report from Bibby Financial Services which looks at the state of the UK construction industry and highlights a number of issues facing smaller construction firms. In this blogpost we’ll look at the key findings of the Planning for Growth report and examine where the industry stands in the run-up to the general election in May.
Key findings from the report can be seen below, and issues with late payment and skills shortages are the biggest challenge. Although, as we can see there are some positive signs to celebrate for construction SMEs.
Activity and performance
- Over half of businesses had between five and 20 weeks of work in their pipeline
- The average amount of pipeline work was 17 weeks
- SMEs in the West Midlands had the biggest pipeline with a quarter citing 45+ weeks of work planned
- Almost half of all businesses (49 per cent) said they had more work in Q4 2014 than the same period in 2013
- One in ten said they had less work than a year ago
- Only ten per cent said they benefit from national projects
- One in five (19 per cent) said that August is the busiest month in the year, followed closely by July
- Late payment, skills shortages and government red tape are the biggest challenge for subcontractors and small construction firms
- Over 70 percent had written-off money as bad debt over the past three years
- Of those, the average amount written-off was £30,465
More work than last year…
Almost half (49 per cent) of construction firms featured in the report said they had more work than a year ago, this encouraging figure is backed-up by figures which reveal that, on average, firms had over 4 months (17 weeks) of work lined-up. 37% of those surveyed say that Help to Buy has helped the sector, the scheme itself has now been extended to 2020.
Construction firms have taken longer to get back on track than other sectors, but the research does highlight positive news for the sector as a whole. While many construction SMEs expect to see higher work volumes than a year ago, there is also some optimism leading up to the election in May. However, as the report highlights, there remain a number of challenges for the sector to face if it is to perform on par with other UK industries.
BIBBY FINANCIAL SERVICES
As the UK’s leading independent invoice finance specialist and a trusted provider of cashflow funding to over 7,000 businesses, Bibby Financial Services provides a range of finance solutions for companies in over 300 industry sectors.
For more information about Bibby Financial Services’ cashflow solutions, visit: www.bibbyfinancialservices.com or call 0800 91 95 92.