The construction sector continues to be a bellwether for the economic climate.
With the news that the Buckingham Group has halted trading, the current challenging economic environment is ensuring that construction failures continue to make headlines. Last week, the major contractor that was working on the expansion of Liverpool FC’s Anfield Road stand has confirmed that it has filed a notice to appoint administrators.
The £700m turnover Buckinghamshire Group employing over 600 people stated that it is “unable to continue trading at this current time” and explained that their crisis was due to rapidly escalating contract losses and a sharp reduction in liquidity.
This unforeseen failure will have left a long list of creditors being owed millions of pounds. Fortunately, a fair slice of this will be picked up by the credit insurers, thereby protecting policyholders from potential liquidity and financing issues as a consequence of a significant bad debt.
Naturally, it isn’t only the construction sector that is suffering; history suggests that other sectors will also be affected by high interest rates, high energy costs, supply chain inflation and lack of finance (as evidenced by the recent high-profile failure of Wilkos).
Clearly, an increase in the level of insolvencies means the chance of a bad debt amongst your own customer base is more likely. Why not gain a health check on your three largest customers? We’ll provide an overview of the credit risk attaching to your 3 biggest customers based on the view of a panel of our insurance partner underwriters. This will deliver valuable insights into credit risk, allowing you to make informed decisions about the level of credit offered to your top customers.
