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  "path": "/money/uk-construction-faces-dire-cashflow-crisis",
  "publishedAt": "2026-06-09T19:49:58.000Z",
  "site": "https://www.gbnews.com",
  "tags": [
    "Viral beauty chain confirms four new UK store openings including first-ever shops in Scotland",
    "Century-old British manufacturer collapses into administration with 170 jobs lost amid soaring costs",
    "Young workers could get early access to £12,548 state pension lump sum under new plan",
    "The GB News Editorial Charter"
  ],
  "textContent": "\n\n\nBritain’s construction industry is facing mounting financial pressure, with the vast majority of firms either already experiencing or approaching serious financial distress, according to new research from accountancy firm Menzies.\n\nThe report, titled Fixing the Foundations, surveyed 250 senior finance leaders across UK construction and property businesses.\n\n###\n\n\n\n\nIts findings showed that 86 per cent of firms are either already in financial difficulty or expect to face serious distress in the near future.\n\nOn average, businesses surveyed said they expect to reach a critical financial position within the next eight months.\n\n###\n\n\n\n\nTRENDING\n\nStories\n\nVideos\n\nYour Say\n\n###\n\n\n\n\nDelayed payments continue to place significant pressure on cashflow across the sector.\n\nConstruction firms are now waiting an average of 53 days to receive money owed to them, with the industry having recorded some of the highest insolvency levels in the UK for several consecutive years.\n\nLate payments were reported by 93 per cent of businesses surveyed, with companies citing overdue invoices from clients, contractors and supply chain partners.\n\nThe average delay extends to almost two months beyond agreed payment terms. The report found that many firms are now relying on their own reserves to continue funding projects while waiting for payments to arrive.\n\nOne in five businesses said they are effectively financing clients’ projects using their own working capital due to ongoing payment delays.\n\n###\n\n\n\n\n###\n\n\n\n\n###\n\n\n\n\nNearly a fifth of respondents identified late payments as one of the biggest threats facing the survival of their business.\n\nThe financial strain is also spreading throughout the wider supply chain, with delays affecting firms’ ability to pay suppliers and subcontractors on time.\n\nRising costs across the industry are adding further pressure to already weakened balance sheets.\n\nFixed-price contracts agreed before the recent inflation surge have proved particularly damaging for many businesses.\n\n### LATEST DEVELOPMENTS\n\n\n\n\n  * Viral beauty chain confirms four new UK store openings including first-ever shops in Scotland\n  * Century-old British manufacturer collapses into administration with 170 jobs lost amid soaring costs\n  * Young workers could get early access to £12,548 state pension lump sum under new plan\n\n\n\n###\n\n\n\n\n###\n\n\n\n\nAccording to the findings, 98 per cent of firms identified older fixed-price agreements as a major source of financial stress.\n\nOne in five companies said contracts agreed before prices rose are now generating significantly lower returns than originally expected. A further 18 per cent said some projects have been delayed for so long they are no longer profitable.\n\nExternal economic pressures are also creating additional challenges for the sector.\n\nNineteen per cent of firms said uncertainty surrounding US tariffs had made sourcing labour and materials more difficult and expensive.\n\n###\n\n\n\n\n###\n\n\n\n\nA further 17 per cent identified Brexit-related issues as contributing to similar supply chain pressures.\n\nFreddy Khalastchi, partner at Menzies LLP, warned that strong workloads can sometimes disguise underlying financial problems.\n\nHe said: \"Too many construction businesses are still trading, still winning work, but heading in the wrong direction without realising it.\"\n\n\"A full order book can mask a lot of problems, and in construction the gap between looking busy and being profitable can widen faster than most owners appreciate.\"\n\n###\n\n\n\n\n###\n\n\n\n\nMr Khalastchi urged businesses to seek professional support as early as possible when signs of financial strain begin to emerge.\n\nThe report also found growing support within the industry for Government intervention to address some of the sector’s challenges. A quarter of firms said they wanted measures introduced to help stabilise material and energy costs.\n\nAlmost as many respondents backed the creation of a single construction regulator to replace the existing fragmented oversight system.\n\nMandatory maximum payment terms for contracts were supported by 23 per cent of businesses surveyed.\n\n###\n\n\n\n\n\n\n\n\n\n\n**Our Standards: The GB News Editorial Charter**",
  "title": "UK construction faces dire cashflow crisis as most firms just EIGHT MONTHS from collapse"
}