Credit Management 2019

EXCLUSIVE REPORT
AUTHOR – Markus Kuger
The continued
uncertainty
around Brexit is
likely to be a key
factor influencing
the significant
slowdown in
growth and an
increase in business
failures across the
construction sector.
Financial information shows a significant
decrease in the proportion of assets financed
by debt with specialised construction activities
seeing a significant average reduction of nearly
36.2 percent in debt ratio. There has also been
a marked decrease in current ratio. This is a
liquidity measure indicating more difficulties
to cover the short-term debt with short-term
assets.
PLANNING AHEAD
The continued uncertainty around Brexit
is likely to be a key factor influencing the
significant slowdown in growth and an increase
in business failures across the construction
sector. Dun & Bradstreet’s analysis predicts that
economic performance will worsen if the UK
leaves the EU without a deal so there may be
bumpier roads ahead.
The construction industry is likely to be
monitored closely for early signs of the economic
impact of whatever Brexit scenario plays out in
2019. Although there has been a slowdown, it
continues to be a sector that is increasing in size
and constitutes a significant proportion of the
UK’s small and micro businesses.
Dun & Bradstreet’s baseline scenario is for
a delayed, soft Brexit, but things are changing
quickly. The best advice for construction
businesses is to monitor the situation and try
to establish a transparent view of supply chain
and business relationships to enable a quick
assessment of how the latest development will
impact business operations once a decision is
made.
Markus Kuger is Lead Economist at
Dun & Bradstreet.
Markus Kuger
The Recognised Standard / www.cicm.com / March 2019 / PAGE 62