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Banks inhibit growth of construction SMEs

Small and medium-sized businesses (SMEs) in the construction sector expect to show a profit in 2010, but banks are stallin growth, according to research from QBE.

63% of SMEs expect either flat or increased turnover in 2010, although 68% say banks are inhibiting growth by witholding lending and preventing new plans.

However, a small majority - 53% - believe SMEs are better placed to deal with any upturn compared to a year ago. The same proportion believe their business will survive should difficult conditions endure.

Managing Director of UK National, QBE European Operations, Terry Whittaker, said: “The difficulties that this vital industry has experienced over the last eighteen months have been well documented but, despite continued pressures, it is evident that SMEs in the construction and building sector are maintaining stability. 

“With these businesses experiencing unprecedented cost constraints, it is essential that they are given support to ensure they remain buoyant and to enable them to develop,” he said.

SMEs remain focused on business survival rather than development, however. 58% said they would not expect to invest in their business in the next six months.

Only 5% of SMEs in the sector said they would fund a business investment with a bank loan.

Readers' comments (1)

  • Aritcle title is "Banks inhibit growth of construction SMEs"

    The closing comment is "Only 5% of SMEs in the sector said they would fund a business investment with a bank loan".

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