Credit firm鈥檚 report says sector鈥檚 first quarter revenues down by 6% to 拢294bn
Carillion鈥檚 collapse earlier this year contributed to a 6% sales slump across the wider construction industry during the first three months of 2018 and a 73% increase in the number of company failures over the same period, according to new research.
The latest said it was seeing similar challenges across other industries and it was a 鈥渨aiting game to see what the mid to longer term future will deliver鈥�.
The report said UK construction revenues fell from 拢313bn to 拢294bn in the first quarter of 2018, while 934 firms went into receivership.
The construction sector was also hit with bad debts nearing 拢17m in the first quarter, the report revealed, up a third on the previous three months.
鈥淒irectly linking these disappointing figures for the construction sector to Carillion would be too simplistic,鈥� it said, 鈥渂ut clearly the impact had been felt at the start of the year and now the road to recovery is unpredictable.鈥�
But while industry sales were down, retained profit, employment, start-ups and net worth all saw a boost compared to the last three months of 2017.
Cato Syversen, Creditsafe鈥檚 chief executive, said high profile corporate collapses and scandals in the last three months had been costly and had undermined confidence in UK business.
鈥淚t鈥檚 particularly disappointing following the previous three months, where we reported a fourth quarter rise in sales and fall in bad debt.
鈥淚n the last three months, we have seen more than 1,000 companies fail, a rise of over a quarter,鈥� he added.
Carillion鈥檚 collapse has also galvanised UK MPs to get behind Peter Aldous鈥� retentions bill, which has its second reading in Parliament later this month.
The Tory MP鈥檚 private members bill proposes that cash retentions are held in trust.
His bill has the backing of 120 MPs, including the shadow chancellor John McDonnell, Liberal Democrats鈥� leader Vince Cable and defence secretary Gavin Williamson.
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