More than half of firms in the building contractors sector have noted falling margins, indicating that a recession could be on the way, according to a new report.
Over a third of firms indicated a need for short-term financing, a sign that costs are running ahead of cash flow, notes the report from Industry analysts Plimsoll Publishing. “This is doubly dangerous at a time when banks and financiers are looking hard at their loan books and therefore places these companies in an even more vulnerable position”.
Plimsoll’s report, which is based on data from 2,000 contractors, said that one in nine building contracting firms could disappear if this trend continues or deepens.
David Pattison, senior analyst at Plimsoll, said: “We are reading every day how the credit market and the world of finance is been hit, but nonetheless I was still surprised to see just how much the Building Contractors Market is feeling the pressure. I hope this report is recognised as an early warning sign and managers read this and use the findings to steer a course though these tricky times.”
Source
Building Sustainable Design
