The study says about 129 companies are in the business “danger zone”. And it also maintains that the performance of a further 248 (25%) merits caution.

On the brighter side, some 317 firms (32%) are in a strong financial position.

A further Plimsoll study covering the top 917 timber products businesses, which includes companies dealing with the raw product such as processors, pallet makers and manufacturers of furniture and packing boxes, suggests that 141 (15%) are in the high risk zone, while 303 (33%) are performing strongly.

Plimsoll senior analyst David Pattison said job losses and cost cutting were essential if high risk companies were to improve their prospects. “It seems inevitable that we will see a period of consolidation,” he said.