FMB: Outlook bleak for construction firms

FMB: Outlook bleak for construction firms

Building firms could be fighting hard for the rest of the year to stop themselves needing insolvency advice from business recovery specialists.

In fact, going by comments from the Federation of Master Builders (FMB), things look bleak in general for the construction industry.

Director of external affairs Brian Berry predicted that there are more hard times to come for companies in the sector, with the current tough trading environment continuing for the foreseeable future.

When asked about the outlook for building businesses for the remainder of 2011, the expert was notably downbeat.

"We are not optimistic at the moment because obviously the government cutbacks are still making their impact felt on the economy and people are still very worried about job security," he said.

"Even if they were thinking of moving, they are tending to sit tight because they don't want to take on extra debt and they don't want to increase their mortgages."

Mr Berry added that even routine jobs are starting to dry up as homeowners start to look towards short-term savings.

"We know from our own members who do a lot of repair and maintenance work, that that market has also fallen away because people literally do not have the money to spend on having new bathrooms, new kitchens or extensions.

"People tend to be holding on to their money because of the uncertain economic situation."

An example of how the industry is struggling can be seen in the case of Profix Limited – a windows and doors firm that recently asked SFP for insolvency services to help save it from bankruptcy.

With a turnover of more than £3 million, the business was let down by its failure to budget for bills from Her Majesty's Revenue and Customs, which made up a large part of its debt.

SFP partner and administrator Simon Plant urged construction firms to bear in mind that they will have tax bills to deal with and to prepare for them properly.

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