The spring 2010 recovery of the construction industry has "definitely slowed", the Union of Construction, Allied Trades and Technicians (Ucatt) has said.
Government spending cuts on projects, such as the installation of security fencing
, has started to take hold, with concerns about future insolvencies.
A Ucatt spokesperson said: "There are concerns about the [...] money which has been taken out of the industry by the government cuts and that will have had a bearing on insolvencies."
PricewaterhouseCoopers (PwC) figures, released yesterday (January 9th), show that there were 565 construction insolvencies in 2010's fourth quarter – up 531 from Q3.
"It is telling that overall construction insolvencies during 2010 were still 15 per cent above those experienced in 2008," Mike Jervis, partner in the business recovery services practice at PwC, said.
He added that a "modest" interest rate increase would put "additional pressure" on firms struggling to cope.
Asked about the impact an increase in interest rates would have on small construction firms, the Ucatt spokesperson said: "The fact of the matter is it is never good."