The majority of UK construction companies are in surprisingly good shape to cope with any Brexit fallout, a new report from market analysts Plimsoll Publishing argues.
Having carried out a financial health check on the UK’s 1500 top construction firms, the new report has found that 779 firms are performing well in current market conditions and are well prepared for any uncertainty in the sector.
Plimsoll’s senior analyst, David Pattison, said: “Much like how your doctor would check your health and recommend action, we have done the same with each of the UK’s top 1500 construction companies. Since the decision to leave the European Union, the construction market has been dogged with speculation and uncertainty.
“However our latest research suggests the majority of construction firms are surprisingly well placed. Having said that, however, that’s not to say there will not be an impact, but they are in good shape to cope and respond to any upheaval.”
The study has identified and analysed the vital areas of business performance that lead to success or failure. These factors have then been applied to the 1500 companies to highlight the fittest and those showing signs of serious financial weakness. Depending on the overall financial health, each company was given one of five health ratings:
- 779 firms rated as Strong – these firms are the fittest in the industry and are showing strong financial health.
- 107 firms rated as Good – these firms are improving financial health and can aspire to those rated Strong.
- 156 firms rated as Mediocre –these firms could go either way, they need to fine-tune their business so they do not slip back and improve.
- 206 firms rated as Caution – these firms are showing the early signs of weakness, early prevention measures need to be put in place.
- 252 firms rated as Danger – These firms are showing a serious weakening in financial health, urgent plans are required to treat these weaknesses.
David Pattison continued: “Nobody at this early stage will know the consequences of the Brexit vote, however companies who are rated as Danger have two options: they can hold their nerve and hope to trade their way out, or they can put a survival plan in place and look to consolidate their business. Once you take notice of the warning signs, then directors need to act.”