CJ Construction Blog

The story of the collapse of Wrekin is beginning to read like an Agatha Christie whodunnit. Was it RBS that struck the final blow as the death knell sounded, or did a mysterious, highly-prized ruby have anything to contribute to the sorry demise of a renowned civil engineering contractor?

No doubt all will be revealed in due course. But whatever the final outcome, the fall of Wrekin sends out a warning signal about the banks' appetite for pulling the plug in the current climate.

In the normal course of events, a contractor with a solid track record, £100m turnover and a strong forward order book could expect to count on some short-term support.

The spate of contractor failures at such an early stage in the economic cycle is a warning to all and speaks loudly about the dim view banks are taking of the sector. This may explain why accountant BDO Stoy Hayward has come up with the shocking forecast of 10,000 firms going bust this year.

At the moment, the bank mantra seems to be, "it's not your fault, it's the construction industry".

This will come as no comfort to the many contractors and their staff who will suffer from such a misplaced and hard-bitten attitude to risk. This is no plea for construction to be treated as a special case, but banks need to realise their attitude to construction has become the heart of the problem.