New figures released by The Insolvency Service have revealed that close to 200 Scottish construction firms went bust within the last year.
Just under 50 companies went into liquidation during the first quarter of 2012, which brings the total in the past 12 months to 198. That is a huge increase of 29% on the figures from the previous 12 months.
The news left the Scottish Building Federation (SBF) calling for “immediate action” to be taken.
Michael Levack, the SBF chief executive, went on to say:
“Politicians at all levels of government can and must do more to prioritise investment in building the homes, schools, hospitals and other facilities our communities need. Without a pipeline of new work, more construction firms face the real prospect of being forced out of business and many more Scottish construction jobs will be lost.”
Though the construction industry has been the worst hit sector in Scotland, the news for other businesses is not good either. On a national level, firms are more likely to fail in Scotland than in England and Wales, with failure rates 40% higher.
Employing new strategies for commercial finance in Scotland is helping many survive and some thrive though – with invoice factoring becoming an increasingly popular route.
However, the environment is still incredibly challenging, as recent analysis by PKF accountancy showed. Cross sector failings in Scotland hit 432 in the first quarter of 2012, representing a failure rate of 1% for all businesses in the country.