Crane over building

More woes in Construction

One of Wales’ oldest construction firms falls into administration after 87 years, with the loss of 104 jobs.

Jehu Group specialised in construction and development projects for registered social landlords and councils in Wales and the south-west of England.

Perhaps the most worrying thing about this scenario is the fact that the company had around £100m in live projects at the time of writing this.

As is almost a weekly occurrence, the main reason behind the downfall of the company was a combination of thin margins and fixed price contracts pre-pandemic.

Construction site crane over building

A small increase in variable costs such as materials, labour, or even delays on site, means that contractors are having to finish projects at huge losses, when they had forecast to make a reasonable profit.

This is of course causing huge pressure on cash-flow with liquidity being squeezed from all sides.

The next 18 months or so is looking like a bumpy ride with additional pressures being added to the mixing pot, with energy price rises, increased finance costs due to base rate increases and more instability with material cost and availability.