Monday, January 10, 2011

Huge rise in building firms going bust | The Post

Huge rise in building firms going bust
09 January 2011 By Gavin Daly

Almost 700 building companies collapsed last year as activity in the construction sector ground to a halt.

New figures show that 684 construction and engineering firms went into liquidation, receivership or examinership in 2010.

The number of collapses was up by 15 per cent on 2009, when 593 companies in the sector went out of business, according to research by business advisory firm FGS.

Just 299 building firms closed in 2008.

Declan Taite, head of corporate restructuring and insolvency with FGS, said that construction-related collapses accounted for 39 per cent of all company failures last year.

The collapses included those of high-profile names such as Michael McNamara Construction and the Pierse building group, as well as many small-to-medium-sized building businesses. In total,1,763 companies closed their doors in 2010, including 233 in the hospitality sector and 146 in the retail industry.

However, there was a reduction in the number of motor businesses that closed - down to 78 from101 in 2009.Closures in the interior design and furnishings business also slowed, with 102 collapses, compared to 120 in 2009.

There was a sharp increase in IT collapses, which rose from 36 in 2009 to 62 last year.

Taite said that, while the number of collapses rose last year, there was a marked slowdown in the rate of failures, which had doubled between 2008 and 2009.

He said the high level of failures reflected the continued economic turmoil and the lack of liquidity for businesses, which are struggling with cashflow problems.

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