As Sherlock's creator put it, 'It is a capital mistake to theorize before one has data".
The data collected by KPMG on the number of insolvencies over the last six months shows we are just beginning to see a small increase in insolvencies and, as usual, the construction industry is worst hit. The reasons are quite simple - increases in import costs will hit margins (no surprises there!) and this is especially problematic in an industry, such as construction, that operates on such low margins.
What's important is what is learnt from the data. The construction industry needs to have open and honest contract negotiations and deal with things like currency risk and performance bonds in a pragmatic way - this is one table the industry does not want to top!
Insolvency numbers in the UK rise after Brexit vote. The construction industry was the worst hit, with 174 firms within the sector becoming insolvent. This was particularly due to an increase in costs for imported raw materials, which squeezed profit margins.