Construction bears the brunt as company money woes hit 5-year high

The closely watched report on companies in financial distress from insolvency group Begbies Traynor wasn’t so much waving the red flag as flapping it frantically in the wind.

The company on Monday said it had seen the biggest increase in financial distress among UK companies in three years.

Almost 330,000 UK firms were suffering “significant” distress. Begbies said it was the largest number in at least five years, having grown 25% in the past year.

It pointed to particular trouble for property and construction companies, which it said was further evidence of a cooling housing market. Smaller businesses bore the brunt of the distress.

Julie Palmer, a partner at Begbies, said: “While we are seeing rising levels of distress across all corners of the UK economy, the quarterly deterioration in the property and construction sectors is particularly concerning.”

She added that it raises doubts over whether they “have strong enough foundations to cope with upcoming headwinds… Brexit and the rising cost of imported goods”.