The West Midlands construction sector has suffered another painful setback after three firms collapsed in the space of a week.
Dozens of jobs have been axed after Coleshill-based Controlled Construction was wound up, while 67 jobs were lost when commercial fit-out firm Ibex Interiors closed, following the collapse of parent firm Doyle, and Rubery company BJC Demolition has also called in administrators.
Experts point to cuts to public spending as the main reason – but say building firms need to play a part in the recovery with the sector in the region facing five years of “sluggish” trade.
David Bucknall, chairman of the West Midlands Centre for Constructing Excellence (WMCCE), said: “Businesses in the construction industry are still finding the current trading conditions very tough, as these latest company administrations unfortunately demonstrate.
“The building and construction industry has been one of the hardest hit sectors during the recession and the latest insolvency figures from Experian, which show the sector recorded the highest number of company failures during May, provide further proof that the industry, particularly in the regions, is not out of the woods yet.
“Significant cuts to public spending on both housing and non-housing construction have not helped the situation and while output is expected to increase in 2013, growth over the next five years will be sluggish.”
Coleshill-based Control Construction, which traded as CCL, is in the final stages of being wound-up after laying off the remainder of its employees last month.
The firm employed more than 40 people during its peak, but that number has fallen to around 24 in recent times as the building sector downturn took its toll.
Administrators said the tough economic climate caused the firm, based on the Station Road Industrial Estate, to run up debts and restricted cash-flow.
The business, which has been trading since the 1980s, originally specialised in relining furnaces and boilers, but recently diversified into thermal insulation and asbestos removal.
Meanwhile, Richard Hawes, Dominic Wong and Chris Farrington, partners at Deloitte, have been appointed joint administrators to Doyle and axed all but 30 of the firm’s 290 staff.
Ibex Interiors, which is based in London with a satellite office in Birmingham, directly employed 67 staff as well as a significant amount of sub-contract labour, and was closed.
In a statement, Deloitte said the move was taken “in the absence of any funding”.
Mr Hawes said: “The group has suffered a prolonged period of difficult trading which has resulted in it being unable to meet its financial obligations. We are in discussions with several interested parties to sell various parts of the business. We will continue to trade the Blythewood business on a limited basis with a view to securing a sale as a going concern.”
BJC Demolition called in administrators on June 1.
Nobody from administrator Findlay James Chartered Accountants was available to comment when contacted by the Post.
Mr Bucknall said it was crucial to re-build the construction sector – not least because it contributes up to ten per cent of GDP – and companies had to play a key part.
“Both government and the CBI are continually talking about using construction infrastructure to kick-start the economy,” he said.
“However, as important as Government support is, it can not do it all on its own and the construction industry also needs to play its part. Companies need to accept that the game has changed and these are different times we are operating in. Those that adopt new business practices and principles, such as Building Information Modeling (BIM) and lean working, will be the ones that not only continue to survive but thrive in construction.”