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Lehman collapse hits construction

Consultant Mott MacDonald said this week that it was trying to reclaim cash owed to it by failed merchant bank Lehman Brothers. It is thought other construction firms will also be affected.

"The amounts of money we are owed are relatively small – and in the long run we may get some of it back," said a Mott MacDonald spokesman. "It’s one of these things that happens when something of the magnitude of this crisis occurs, so we have to be philosophical about it. There will be many people who are much worse affected than us," said a spokesperson.

Lehman Brothers administrator Price Waterhouse-Coopers said that bank’s collapse had left thousands of companies in debt or awaiting payment. "We cannot yet give answers on the whole picture, but we have thousands of companies awaiting payment we have to deal with," a spokesman for Price Waterhouse-Coopers said.

The Association for Consulting & Engineering (ACE) last week published research that showed that 82% of its members had already been hit by the credit crunch, or were going to be affected. Forty-four per cent said the slowdown has had an impact on their business strategy. Twenty three per cent said revenue had been hit, and 25% said margins had been hit.

An ACE spokesman said late payment was on the increase and that it was revising its guidance on how to deal with it.

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