Construction remains the worst-affected industry for insolvencies, according to the latest official monthly figures.
Data released today (18 October) by the Insolvency Service revealed the construction industry continues to see the biggest number of administrations and liquidations by sector, with 4,310 firms collapsing in the 12 months to 31 August 2024.
This equates to 17 per cent of all UK business collapses, the Insolvency Service said in a statement.
Retail and wholesale firms were the second and third worst-hit sectors, followed by vehicle repair firms.
All-industry figures showed there were 1,973 registered company insolvencies in England and Wales last month. This was 2 per cent higher than in August 2024 (1,943).
The Insolvency Service’s data tables did not include a breakdown of sectors for September.
The highest-profile construction casualty last month was ISG, with eight of its subsidiaries going under.
Jo Streeten, managing director at Aecom (Building & Places), said: “The fallout of ISG’s collapse, and its potential impact on the supply chain, remains the major watch across the industry, with insolvency levels remaining persistently high within construction as well as across the wider economy.”
The latest official insolvency data follows a warning on Tuesday (15 October) from homebuilder Bellway that activity in residential construction was unlikely to pick up until spring next year.
Kelly Boorman, national head of construction at consultancy RSM UK, said that “a number of large administrations” will “eventually cascade through the supply chain, adding to ongoing funding and procurement challenges which will impact delivery of projects”.
Streeten said: “Sentiment has weakened since the summer – putting greater emphasis on the outcomes of the chancellor’s Budget [on 30 October]. While businesses appear likely to have to shoulder an increased tax burden, there are hopes the Budget will also bring with it new policies to boost investment and offer more certainty around major infrastructure projects.”
Boorman added: “There is also uncertainty as to how construction businesses will manage growth, due to fragility in the supply chains and the continued risk of overtrading. Businesses are held back by fixed pricing and planning constraints, alongside labour shortages and tight funding.
“In order to really accelerate housebuilding and combat insolvencies, government must support distressed businesses, protect labour, and reform financial measures including payment terms and access to funding.”