Scottish Building Federation Chief Executive Michael Levack has said the latest preliminary UK insolvency figures which indicate that the number of Scottish construction firms forced into compulsory insolvency has rocketed by 245 per cent in the last three months of this year, compared to the same period as last year, paints a worrying picture of the continuing impact of the economic downturn on Scotland’s construction sector.

Figures from the Office of National Statistics, published on August 6th by the UK Insolvency Service, show that the number of construction companies in Scotland entering compulsory insolvency jumped from 14 in the second quarter of 2009 to 48 in the last three months of this year.


Furthermore, the compulsory liquidations from Q1 2010 to Q2 2010 has risen 14.5 per cent from 42 to 48 construction firms.

Meanwhile, the number of Scottish firms in the construction sector subject to creditors’ voluntary liquidations rose 120 per cent from 10 to 22 in last three months of this year. Whereas, the number of Scottish construction firms enter creditors’ voluntary liquidations rose 215 per cent from seven to 22 in last three months of this year compared to the same period as last year.

Mr Levack said: “Seeing in black and white that 48 Scottish construction companies entered compulsory insolvency in the second quarter of this year, compared to 14 in the same period as last year, is a stark reminder that it’s grim out there.

“For an industry of such crucial importance to Scotland’s economy, we simply can’t afford to allow the number of firm’s going down the pan to continue at the rate it is going.

“We desperately need immediate action to shore up remaining firms in the industry or we will suffer a major shortage of construction firms and capacity that will hinder Scotland’s faltering economic recovery and could tip us into a double dip recession.

“The Government must apply immediate pressure on banks to appropriately lend in order to save the construction industry.”

(GK)