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One in three construction businesses in the North West are at risk of failure within the next 12 months, according to figures compiled by the insolvency trade body R3.

The figures, which are based on data from Bureau van Dijk’s Fame database, show that 7,270 out of 22,307 construction businesses in the North West – or 33 per cent – are considered at risk. This compares to 26 per cent of businesses at risk in the region overall.

They follow the construction output figures released today which show that output in the first quarter of 2013 was down by 2.4% on the previous quarter and 6.5% on the first quarter last year.

Jeremy Oddie, North West regional chair of R3 and head of recoveries at accountants Mitchell Charlesworth, said: “The construction industry has been one of the sectors worst affected by the downturn. While key capital projects are continuing, public and private sector clients have reined in their spending. Meanwhile changes to building regulations have failed to make much impact on the domestic sector.

“There is some comfort as R3’s recent Business Distress Index show that signs of distress amongst construction businesses are decreasing, although few are showing signs of growth. The market is still sluggish and likely to remain so for some time. Construction businesses need to keep tight control of cashflow to ensure their survival until the market improves.”