While UK construction companies fall like flies, demolition remains oddly resilient. But why?
The front cover of the latest edition of Inside Construction magazine carries the alarming headline “Recession Kills 6,000 Construction Firms”. Read a little further on and the story – based on information from The Insolvency Service – recounts how more than 6,100 UK construction companies have fallen victim to the deepest and longest recession in living memory since the tail end of 2010.
Prompted by that I took a quick scan though our archives and, while I wouldn’t claim that our coverage or our archives are 100 percent reliable, the findings were oddly contradictory. Over the same three year period, only four notable UK demolition companies – Controlled Group, Armoury, Border Demolition and JG Fowlie went out of business with another – Goodman Price – voluntarily stepping away from an industry that it believed was no longer economically viable.
Of course, as the UK’s largest employer, the number of construction companies outweighs demolition by a considerable margin. But 6,000 against just four?
The UK in general and its cities in particular are pretty much full, so any construction taking place generally requires some form of demolition. So how is it that construction companies are falling like flies while demolition remains largely unaffected by the vagaries of economic recession?
One explanation could be that demolition companies and the individuals behind them are quick-reacting entrepreneurs that will find a way to turn a buck even as the economic world crumbles around them. Another is that demolition runs a pretty tight ship and is able to withstand the occasional downturn because they run lean and mean. And another is, quite simply, that when the going gets tough, construction waves the white flag while demolition slugs it out to the bitter end.
A more worrying explanation – and one that I fear may be closer to the truth – is that the current owners of demolition companies that may have been in the family for two, three or even four generations are hanging on for largely sentimental reasons when the economics suggest this is the least sensible course of action. As a result, company owners are barely taking a wage themselves or are living off the fat stored from better times, merely to keep their respective companies going.
Admirable though this may be, it is nothing more than a short-term solution to a long-term problem. While it seems that some construction companies threw in the towel at the first bite of recession, those demolition companies that are surviving on determination and sentimentality cannot do so forever. And, with no promise of an end to the current double-dip recession, I fear that we may yet see further members of the UK demolition community succumb to economic pressures.
I sincerely hope I am wrong.
