Expert Insight: Julie Palmer reacts to Q3 Red Flag Alert report

Julie Palmer

Regional Managing Partner

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Expert Insight: Julie Palmer reacts to Q3 Red Flag Alert statistics

Updated: 29th November 2018

Red Flag Alert Q3 Statistics Unveiled

Recently released Red Flag Alert statistics for Q3, show a strong level of stability in the construction sector when compared to last year’s figures.

Published by Begbies Traynor, parent company of RBR Advisory, the quarterly Red Flag Alert report compiles data around the financial health of UK businesses and is recognised as being one of the most accurate indictors of corporate economic well-being.

Q3 statistics found that construction companies classed as ‘in distress’ dropped by 2 per cent, meaning that around 1000 companies are now more optimistic about their financial prospects.

The beginning of 2018 came with the unexpected announcement of the collapse of construction giant, Carillion, which disrupted the build of primary school projects and hospitals across the country, not to mention the loss of over a thousand jobs.

"The report shows that 469,006 companies across the country are now classed as being in ‘significant financial distress’, an increase of 5% compared to the same quarter last year. "

Deal or No Deal – Brexit

With the protracted negotiations around Britain’s exit from the EU and a lack of clarity surrounding the withdrawal agreement, in particular when it comes to trade deals with European companies which could directly affect the construction industry, the future for construction companies is anything but certain.

Despite this, however, the construction industry is in a strong position to begin 2019, with many healthy signs supporting this. Construction leaders such as Galliford Try, Kier & Wates and Balfour Beatty all accepted significant large-scale development projects during 2018, showing continuous growth in the industry.

The report shows that 469,006 companies across the country are now classed as being in ‘significant financial distress’, an increase of 5% compared to the same quarter last year. The construction industry has been challenged by a number of commercial changes spanning over the last decade, with more hurdles undoubtedly on the horizon for 2019.

The construction industry weathered the storm during 2018 and no doubt the coming year will be one which will test the waters and demand resilience should the sector continue to flourish.