Tradesmen being squeezed on profits
New research suggests customers reducing spend and haggling more on price
Tradesmen are currently particularly vulnerable to the effects of the downturn as customers try to squeeze them on price, it has been claimed.
Customers are reducing spend, haggling on prices and paying late, according to research by SimplyBusiness.co.uk.
The insurance comparison site said 42% of tradesmen were questioning their ability to make it through the financial year if current conditions persist.
A further 80% recorded a fall in customer spend and 97% felt they were being unfairly squeezed on profit margins by customers.
Cashflow in the industry is also being hit with customers paying invoices an average of 35 days late. Some 64% said they feared a rise in customers defaulting entirely on their debt.
Tony Deacon, chief executive of SimplyBusiness.co.uk, said:
“In terms of recession, tradesmen are in the eye of the storm. Financially, times have never been tougher and it's no surprise that the cracks are starting to show.”
However, on the up side, nearly 40% of tradesmen have reported an increase in home improvement works as a result of the housing slump as customers choose to improve their own homes instead of moving.
© Crimson Business Ltd. 2009