The poll of 1,000 of the country's leading builders by industry analyst Plimsoll found that 496 were in trouble.
Not all of them will survive the recession, the report warns, and those that do will be very different businesses from what they were just a year ago. But they will also be more streamlined and therefore better businesses.
'Of those companies who do survive, very few will be in their current shape and many will be in the hands of new owners. This further supports the argument that despite the obvious tragedy of job losses, livelihoods lost and the pain of a business in decline this period is inevitable and can only be good news for the market in the long run,' the report says.
Out of the 496 firms on the survey's danger list 287 said they had increased their debts in 2008, 336 saw their profits fall last year and 198 said they are losing money. A large number, 245, were set up over 10 years ago.
'There is no doubt that recessions catch bad businesses out. Those companies that have entered this period ill-prepared have placed themselves at a distinct disadvantage. Many have grown used to running their businesses on high-risk business models, propped up largely on finance,' said senior analyst David Pattison.
One of the latest builders to suffer is John Nicholls of Truro, Cornwall, which has been trading for 47 years. 'The company has been severely affected by the economic downturn and has experienced a significant reduction in orders,' said Tim Ball, joint administrator from accountancy firm Mazars.
