The latest ONS statistics have shown that the UK economy avoided a further shrinking in the first quarter of 2013 with "growth" of 0.3%. Whilst this is a relief for the Government it is almost just a rounding error.
The main thing that these statistics have revealed is the difference in performance of different sectors of the economy. The service sector grew by 0.6% whilst the construction sector continued to shrink by a further 2.5%. Meanwhile the much hyped rebalancing of the economy appears to not have happened as 0.03% growth is all it has mustered.
Construction is need of a boost as more businesses fail with McArdle, the civil engineering contractor, being the latest to go into administration.
So what can be done for struggling construction businesses?
In construction the smallest mistake culminating in a cost overrun could be critical. A business may no longer be viable going forward so liquidation might be the only option.
If a business is fundamentally viable then a company voluntary arrangement could be the answer
One particular building company we rescued had an overdraft of £150k with RBS. This bank is known for blocking pre-pack administrations where the business is sold to the encumbents. So after a meeting with KSA Group a rescue plan was put together.
For details of how this building company was rescued please read our case study; CVA Rescues Building Company in the North East