CONSTRUCTION firms in Yorkshire are starting to recover from the shock of the Brexit vote, new figures show.

Business rescue and recovery specialist Begbies Traynor says construction remains the most severely distressed sector in Yorkshire with 2,042 firms affected. But its latest quarterly Red Flag Alert shows a four per cent fall in the number of regional firms in significant distress over the past quarter, reflecting a bounce back.

Construction showed an improvement both year on year and over the past three months with falls in distress levels of three per cent and eight per cent respectively, with 189 fewer financially distressed construction firms in September.

Compared with a year ago, however, there has been a three per cent rise in the number of seriously distressed construction businesses.

Julian Pitts, regional managing partner for Begbies Traynor, said: “It’s good news, albeit something of a surprise, that the construction industry appears to be showing marked signs of improvement, in Yorkshire as elsewhere in the country.

“The Government’s announcement of its new £5 billion homebuilding stimulus package should go some way toward shoring up the apparent bounce back, however decreased investment in the sector and rising prices for raw materials as a result of the weakening pound certainly do not bode well for Yorkshire’s builders over the next 12 months.”

Meanwhile, a new report by online finance firm Future Options shows smaller construction firms are suffering “severe” cash flow problems because of delays in being paid by property developers.

The biggest property developers are taking 56 days on average to pay sub-contractors, two days longer than a year ago, the report said. The delay is damaging growth prospects for sub-contractors and even threatens their viability, it was warned.

Conrad Ford, Funding Options boss, said: “Smaller sub-contractors face the risk of bankruptcy if they are not paid within a reasonable amount of time “.