A new survey from the Office for National Statistics (ONS) has revealed growing pessimism from UK firms across all sectors that they will be able to stay afloat until the end of April.
Before Christmas 1 in 9 firms said they have little or no confidence in being able to weather the current pandemic, rising steeply to 1 one in 7 by 24 January.
The bleak picture has arisen due to a range of pressures on business – from staffing shortages and rising costs to reduced productivity due to lockdown and social distancing. Many will have been propped up by Government lending and furlough scheme, which have combined to reduce the level of insolvencies through 2020.
Indeed it has been extremely difficult to ascertain the true picture in any sector. Recent Government data showed that insolvencies started to climb in December 2020, for the first time since the pandemic started.
Yet the data shows that in the construction sector insolvencies dropped to their lowest level for at least a decade in 2020. The Insolvency Service reported 20 per cent fewer companies going bust than the previous decade-low of 2,457 failures in 2015.
However the prognosis in the construction sector is similar to the UK as a whole, with more than 12% of construction firms having low or no confidence that they will survive. Just two months ago the figure stood at 8%.
At a time when so many companies are fearing their ability to survive, considering credit insurance as a way of managing trade credit risk has never been more important. Here at The Channel Partnership we remain alert to changes across sectors, alongside our trade credit insurance partners, and will be able to provide sector specific advice. Please give us a call.