More than 4,000 construction companies became insolvent in the year to September 2024, official data has revealed.
The latest monthly figures released by the Insolvency Service showed that construction remains the worst-hit sector for liquidations, administrations and company voluntary arrangements.
More than one in six insolvencies recorded by the government agency in the year to September were in construction.
The total of 4,264 cases was down marginally on a year-by-year basis but well ahead of wholesale and retail which had the next highest tally at 3,774.
In September alone, 292 construction companies became insolvent, 117 of them classed as developers or builders, 159 as specialists and 16 as civils firms.
November 2023 saw the highest number of construction insolvencies from the latest year, with 422 firms unable to stay in business.
Across all industries, registered company insolvencies fell 10 per cent on a seasonally adjusted basis from September to October 2024, with 1,747 businesses failing.
But at the time of publication, the Insolvency Service had not updated its sector-specific data tables to include October’s figures for construction.
Jo Streeten, managing director of building and places at consultancy Aecom, said “the number of firms continuing to go bust highlights the fragile condition of balance sheets despite an improvement in operating conditions”.
She added: “Last month’s Autumn Budget gave room for optimism, clearly putting infrastructure investment at the heart of the government’s future growth plans. Firms are likely to feel the pinch of National Insurance costs increasing though before spades go in the ground on new spending.
“Despite interest rates falling and order books remaining strong heading into 2025, careful cost management will therefore need to be a priority throughout the traditionally slower winter period.”
The stubbornly high level of insolvencies contrasts with a downward trend in construction administrations. October saw 28 firms enter administration, according to separate data from Creditsafe published earlier this month.
This was lower than the 37 recorded in the same month last year but still more than October 2022’s total of 19.
