The latest Business Distress Index from RealBusinessRescue.co.uk has revealed the number of construction SMEs in significant financial distress now stands at 71,000 – a 10% increase since the end Q1 (lockdown), and a 6% increase since Q2 – endangering 124,000 jobs.
The website analysed data from Red Flag Alert and discovered that these construction businesses in significant distress are part of 544,000 SMEs in distress across the nation, with a total of 1.8m jobs under threat.
In addition to this, the firm discovered that the number of construction start-up businesses (post-2017) in significant distress had soared by 22% in the last quarter due to the pandemic. There are now almost 13,000 of these fledgling businesses in distress – a 47% increase since the start of lockdown when there were 8,500 in distress.
Shaun Barton, national online business operations director at RealBusinessRescue.co.uk, said: “These latest results demonstrate that while some bigger companies are finding their feet in this recession it is the smaller companies that are suffering the biggest impact. With the pandemic having pushed more than 40,000 into financial distress, the backbone of the UK’s economy is suffering and we could soon have a dangerously top-heavy economy. To put that figure of 40,000 more distressed SMEs into context, there were just over 17,000 corporate insolvencies in 2019 as a whole.”