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Construction firm numbers grow for first time since downturn

More construction businesses are being set up than are folding in the UK for the first time since the start of the financial crisis.

According to analysis from specialist construction accountants NoPalaver, there was a net increase in the number of firms in the sector in 2013, the latest year for which data is available.

There were 5,445 more firms set up than closed down in 2013, compared with a decrease of 7,030 the previous year.

A total of 38,335 new companies were established in 2013, a 31 per cent uplift on the 29,295 that were set up in 2012.

At the height of the economic downturn, the net decrease in the number of firms was 14,400 (2009) and 11,675 (2010).

NoPalaver director Graham Jenner said the figures showed “the construction industry has finally reached a tipping point in its fortunes”.

He added that the demand for new housing and commercial property had helped the development of new firms, with infrastructure projects “also playing a part”.

He added: “After years of underinvestment, there appears to be renewed focus on areas such as transport and utilities.

“While budgets remain extremely tight, high-profile projects such as Crossrail and plans for more high-speed rail links are boosting confidence in the sector.

“This is good news for contractors; as the construction industry gains momentum, their specialist skills and breadth of experience are likely to be in increasing demand.

“New construction businesses especially want to have as much flexibility as possible in terms of capacity while keeping headcount to a minimum as they establish themselves, so using contractors is likely to be a good solution for many.”

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