Industry faces bad debt crisis
More than 1,5000 companies could be in financial trouble, according to Insight Data’s latest analysis of the fenestration industry. However, most have a low credit risk.
Insight analysed the credit rating of 9,075 fabricators and installers and found that 353 fabricators and 685 installers had a high or very high credit risk.
Jade Greenhow, operations director of Insight Data said: “We reviewed the financials of over 9,000 companies and 12% were rated as high-risk companies. If we used the same measurement across the entire industry that means 1,688 fabricators and installers could be in financial trouble.
“The major concern is this data precedes the coronavirus pandemic, so the financial position will have worsened significantly, and this could lead to a serious bad debt situation for suppliers.”
However, Insight Data’s analysis also pointed to 59% of fabricators and 53% of installers as healthy with a low credit risk.
“It is clear there will be a period of instability and some companies will disappear while others become stronger,” Jade said. “As we move towards a recovery, suppliers will want to assess their customers and potential customers to minimise bad debt risk.”