Shopfitter JDS Group Limited was not saved by a critical mass of 350 staff and £30m turnover as it went into administration on 12 February, suggesting that retail problems (see our previous post - Retail insolvencies as the credit crunch hits the high street), or their underlying causes, may be knocking-on into the construction sector.

Certainly, the construction industry is not confident at the moment - less so than retailers according to the ICAEW Business Confidence Monitor (here).

The ICAEW also notes:

"In line with the expected slowdown in predicted capital spending growth, a greater
proportion of firms report increased challenge in raising capital currently compared with 12 months ago. This is particularly the case for those in the Property, Communications and Construction sectors."

JDS is just the first sizeable specialist contractor facing insolvency. Building.co.uk reports More specialists face the axe amid insolvency fears, suggesting that smaller specialist contractors will be the losers.

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"Retail insolvencies start the year" was one of Insolvency Blog's first posts of 2007.

It's hardly surprising to see retail administrations at this time of year - over-leveraged and under-performing retailers have minimum borrowings after the Christmas sales peak and secured creditors will naturally choose that point to stop the losses.

. . . constructive use of formal insolvency . . . can often add value when a business is saleable and the right restructuring team is brought in early enough.

Paul's comment on the retail sector was:

I think the consumer has the last word on who survives - if they wish for identikit high streets, or doughnut towns, or McDonalds bacon sandwiches, so be it.

History seems to be repeating itself. The Sunday Telegraph notes here this week that:

• Insolvency experts are on standby amid fears several high street retailers could collapse in January
  
• Consumers turn to sub-prime lenders as credit squeeze bites
  
• Footwear and clothing retailers have been particularly badly hit by the downturn in consumer confidence
  

Consumer confidence will be the biggest factor in retail business distress for the next few months, and with the weak housing market and a generally cooling economy there is cause for concern.

But the way to address business stress is, as it was a year ago:

• take advice early
• ask a situational expert
• don't panic!

Happy New Year!

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