UK avoids recession – but only just

Date: 10/02/23

Today’s news brought a small glimmer of hope to a construction industry struggling through the perfect storm of economic problems. Figures released by the office of National Statistics show that the UK narrowly avoided recession in the final quarter of 2022, but only just.

Recession is defined as two quarters of negative growth, and following a 0.2% drop in the third quarter, many economists expected a formal recession to be declared after the final figures came in. However, with the UK recording zero growth in the final quarter, a recession was narrowly avoided.

Every little helps

The news will bring some relief across a struggling construction industry that accounts for 7% of the overall economy and between 5% and 7% of all jobs. Nonetheless, it has never been more important to make savings wherever possible, by turning to alternative solutions such as Think Hire’s cost savings guarantee on site energy bills.

Appoint Think Hire as your renewable energy partner
and we guarantee to reduce your operating costs,
as well as cutting carbon emissions to meet challenging ‘net-zero’ targets.

A rough ride for the construction industry

Recent months have seen a perfect storm for construction companies, as they have had to cope with rising prices, chronic supply problems and a shortage of skilled workers. This has combined with steadily rising interest rates, and the aftermath of the COVID pandemic, to push insolvencies to record levels.

Interest rates, which were just 0.1% in November 2021 have risen four times since then to 4%. Similarly, inflation, which stood at just 0.7% in 2021 is now above 10%, with timber and steel prices rising by almost double that. Meanwhile, a shortage of skilled workers as a result of the pandemic and Brexit means there are now estimated to be 45,000 vacancies in the construction industry.

An industry at risk

Although construction makes up just 7% of the UK’s economy, construction companies accounted for 18% of all insolvencies in 2022, according to Creditsafe, with well over 400 businesses going under in December alone. And the outlook is equally grim.

The business intelligence report, Red Flag Alert, expects around 100 construction companies to go bust every week in 2023 as both debts and prices rise while the economy shrinks. The report estimates that there is over £300m in bed debt in the UK construction industry, and it predicts that this could rise to £1bn by this time next year.

A helping hand from Think Hire

Think Hire offers a two-fold solution for struggling companies that cuts both capital costs and operating costs. By changing to hybrid power hire, instead of buying traditional generators, companies can avoid the financial costs of owning equipment outright. Think Hire’s hybrid power hire solutions cover everything from solar back-up generators to solar site lighting, as well as electric vehicle and plant charging and eco-welfare units.

By choosing hybrid power hire over outright purchase, companies only have to pay for equipment when it is being used on a project, instead of carrying the cost of ownership all year round.

A guarantee of savings

In addition to the cost savings associated with hybrid power hire, using Think Hire also comes with guaranteed savings on your operating costs. This has always been the case with Think Hire, but those savings have become even more significant since the banning of red diesel from construction sites.

With the number of construction companies that are facing serious financial problems growing by over 50% in the third quarter of 2022 alone, it has never been more important to cut costs wherever possible. Think Hire are here to help you do just that with eco-friendly technology, smart energy management and guaranteed savings in your operating costs.

To find out more about hybrid power hire from Think Hire, and how it can help your construction company compete in this most difficult of markets, get in touch with our team today.

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