Riskiest Industries in the UK in 2020

1. Residential Building Construction in the UK

2020 Overall Risk Score: 7.0

The Residential Building Construction industry's performance is contingent on cyclical economic fluctuations, and the propensity of property developers to invest in new ventures; movements in property prices, which are conditional on the housing stock demand-and-supply ratio and dictate equity levels; government schemes intended to boost the housing supply; and underlying sentiment in the housing market, which influences property investment and mortgage market activity.

While EU-referendum-related market uncertainties persisted and house price inflation somewhat stalled, industry revenue expanded for five consecutive years through 2018-19 with the support of government programmes and new funding to induce land development and housebuilding activity. However, lower... Learn More

2. Abrasive Product Manufacturing in the UK

2020 Overall Risk Score: 6.9

The Abrasive Product Manufacturing industry produces different abrasives, such as coated, bonded, grain and superabrasives, for a range of applications. The industry is dominated by four large companies, collectively accounting for approximately 55.2% of industry revenue, alongside a number of small and medium-size businesses. Industry demand is determined by downstream manufacturing and construction operations.

Over the five years through 2020-21, industry revenue is expected to decline at a compound annual rate of 2.6%. With the industry's main downstream clients, both in the manufacturing and construction sectors, enduring tough operating conditions over the period, demand for abrasive products has fallen significantly. Fluctuating... Learn More

3. Paper Stationery Manufacturing in the UK

2020 Overall Risk Score: 6.7

Operators in the Paper Stationery Manufacturing industry have endured tough conditions during the past five years due to the continued proliferation of electronic communication, data transfer and storage at the expense of traditional paper stationery products. Weak economic conditions have provided further complications for the industry, as businesses and households have reduced their spending on stationery products. Rising import penetration has negatively influenced the industry's performance. Many retailers have reported rising demand for luxury notebooks and planners, which has arrested decline for operators in this niche market. British producers are expected to move towards more environmentally friendly production methods in... Learn More

4. Executive Search Recruiters in the UK

2020 Overall Risk Score: 6.7

Executive search recruiters, known informally as headhunters, specialise in the recruitment of senior or executive personnel on behalf of clients. Demand for the industry's services is largely influenced by the health of the wider economy; weak business confidence weighs on demand for industry services to fill high-level positions. Revenue growth was recorded year-on-year over the three years through 2018-19, though the COVID-19 (coronavirus) pandemic is anticipated to reverse this trend over the two years through 2020-21. Over the five years through 2020-21, industry revenue is expected to fall at a compound annual rate of 4.3%, including a contraction of 17.8%... Learn More

5. Light Metal Casting in the UK

2020 Overall Risk Score: 6.7

Light metals, such as aluminium, titanium and magnesium, have a low atomic weight compared to other metals. They are cast into components for many engineered products, including automotive and aerospace parts. As a result, the industry's largest downstream markets are motor vehicle manufacturers and aerospace manufacturers. The industry has a moderate level of concentration, with just three firms having market shares greater than 10%, together combining to represent 50.8%.

Declining car registrations, aircraft orders and aluminium prices have weighed on industry revenue growth over the five years through 2020-21. Prior to the COVID-19 (coronavirus) outbreak, car registrations were declining steeply for... Learn More

6. Off-Licences in the UK

2020 Overall Risk Score: 6.7

Off-licences are licensed to sell alcoholic beverages to be consumed off their premises. The Off-Licences industry has endured challenging operating conditions over the past five years. Industry performance has been hindered by intense competition, particularly following the commencement of the supermarket price war in 2014, which entailed significant price reductions across a wide range of alcoholic beverages. In order to remain competitive, industry operators have had to follow suit, at the expense of profit margins. Off-licences have also faced increased competition from online-only retailers, which can offer lower prices due to their lower overhead costs. Over the five years through... Learn More

7. Iron Casting in the UK

2020 Overall Risk Score: 6.7

Cast iron is used in a range of engineered products, including automotive parts, tools, construction and mining equipment and heating equipment. No official statistics are available on imports and exports of iron castings because the industry covers a production process rather than a product. As a result, although the industry is highly exposed to international trade, any trade data tends to include these castings as constituents of products or parts that are included in other industries. The largest downstream market for iron castings in the United Kingdom is motor vehicle and automotive parts manufacturers, followed by construction machinery, water and sewerage companies,... Learn More

8. Electricity Supply in the UK

2020 Overall Risk Score: 6.6

The Electricity Supply industry has developed considerably since its liberalisation in 1999. The market is regulated by Ofgem in Britain and by NIAUR in Northern Ireland. Overall electricity consumption has decreased over recent years as high energy prices and increased adoption of energy-efficient appliances and practises, spurred by the roll-out of smart metering, have encouraged lower energy consumption to reduce bills. This has weighed on industry revenue, which is expected to fall at a compound annual rate of 1.8% over the five years through 2019-20, including a forecast decline of 0.7% to £32.8 billion during the current year.Ofgem has stepped... Learn More

9. Chocolate & Confectionery Production in the UK

2020 Overall Risk Score: 6.6

The Chocolate and Confectionery Production industry is broken down into three subclasses: cocoa product production, sugar confectionery manufacturing and chewing gum production. Factors such as increasing health consciousness, volatile input prices, and increasing competition from imported products have contributed towards downward pressure on industry revenue over the past five years. The organic and fair-trade movements have gathered momentum over the past decade, which has created niche segments and contributed to vegan and reduced-sugar products being produced more widely by industry operators. Chocolate with a high cocoa content has also risen in popularity over the period, as it is perceived as healthier... Learn More

10. Demolition in the UK

2020 Overall Risk Score: 6.6

Services provided by contractors in the Demolition industry are required by general building firms and property developers that plan redevelopments on land where obsolete structures still exist. Demolition firms are contracted to either completely demolish or selectively dismantle structures during the pre-construction development phase. Consequently, the industry's performance is procyclical, characteristically running in tandem with downstream investment in new construction. Specialist operators may offer decommissioning services which relate to the decontamination and deconstruction of nuclear power and pharmaceutical facilities.

Over the five-year period through 2019-20, industry revenue is forecast to grow at a compound annual rate of 19.3% to reach £1.4... Learn More