Article – Construction company administrations are the first symptom of the Covid fallout

Construction company administrations are the first symptom of the Covid fallout

The Christmas season of 2021 was a relatively sterile affair when looked at with the retrospect of 2020’s moral mine field, with the latter’s half-baked rules confusing the people of the UK into spending their festive season with their nearest and dearest over Zoom.

But whilst most of us ended the year sitting comfortably around the table donning paper hats and food babies, the scene was looking increasingly grim for construction companies which, one by one, appeared to drop like flies amid the Omicron shockwave.

In December alone, twenty UK construction companies went into administration, Construction News revealed, including Yorkshire-based Ebor Concretes, Elysium Group Developments, and JMK Civil Engineering.

Among them were some notable losses such as Quinn Infrastructure Services who specialised in building and maintaining electrical, mechanical, fire, fibre and power engineering services for UK rail and utilities networks, with a loss of 200 employees spread across the country after a £5.1m loss.

Similarly, Countesswells Development Limited (CDL), a subsidiary of the Stewart Milne Group which was overseeing the planned construction over 3,000 homes in Scotland went bust. A spokesperson for the company said she was “extremely disappointed” in the administration, adding that they “firmly believe in the future of the project” and will “ensure that the vision…is realised.”

Elsewhere, Derbyshire-based Wildgoose Construction which was formed at the tail end of the 19th century ceased trading after a second-year of losses around £2m combined with trading restrictions.

The most recent addition to the graveyard of covid-culled construction companies comes in the form of Midas Group, an Exeter-based firm founded in 1976 that, after a “very challenging period” went into administration with the loss of over 300 jobs. At the time of its collapse, it was on 45 frameworks in both public and private sectors.

Midas Group chairman, Stephen Hindley, directly blamed the “disruption and supply chain inflation caused by the Covid-19 pandemic” on critical contracts being postponed or cancelled.

“The resultant impact on the group’s working capital”, he continued, “led to the severe liquidity pressure and meant the group was no longer able to operate. It has been a great privilege to work with our many employees, suppliers and customers over the years and my heartfelt thanks goes to them for the tremendous support that they have given to the business”

Areas of construction’s future doesn’t look any less bleak going into 2022, as industry trends suggest further 25% increase in insolvencies in the first half of the year alone. Time will only tell whether the covid shockwave will more closely resemble a nuclear fallout.

Matthew Wood

Originally published in Design & Build UK construction magazine

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