The main business priority for more than a quarter of construction SMEs is survival, a survey has found.
The SME Data Hub survey, carried out independently on behalf of Close Brothers Asset Finance, underlines how rising energy prices and higher inflation are causing headaches for UK-based construction SMEs.
Survival was said to be the main priority in the fourth quarter (Q4) of 2022 for 25.6 per cent of respondents.
The number that regarded growth as their main business priority has fallen to 28.2 per cent from 34.1 per cent in Q3.
Meanwhile, the vast majority – 75.2 per cent – of construction companies with fewer than 250 employees reported that their energy costs had risen over the past six months; 60.7 per cent noted an impact on profitability; and 43.6 per cent said they had to access additional finance purely to cover higher bills.
Some 55.3 per cent of small and medium-sized construction firms noted that the increased cost of doing business was causing cashflow issues, although 65.7 per cent said they planned to raise staff wages to help employees deal with the cost-of-living crisis.
Construction News reported earlier this month that 23 firms entered administration in December – fewer than in November but more than the monthly numbers for August, September and October last year. The majority were SMEs.
Close Brothers’ industrial equipment division CEO Steve Gee said: “Businesses of all sizes are being impacted by rising costs, but it’s SMEs who tend to be the most exposed to changes in pricing.”
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