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Construction insolvencies: Subbies still the biggest casualties

editor

The construction industry experienced the highest number of insolvencies last year – with subbies bearing the brunt. 

Of the five UK sectors with the most insolvencies in the 12 months to November 2024, construction saw 4,102 cases (17 per cent of cases captured), according to the latest findings by the Insolvency Service. 

Construction outpaced wholesale & retail and motor vehicle repair (3,618); accommodation and food services (3,555); administrative and support services (2,394); and manufacturing (1,917). 

Construction insolvencies in 2024 

Jan 2024: 306 (2023: 292) 

Feb 2024: 356 (2023: 333) 

Mar 2024: 315 (2023: 444)  

Apr 2024: 401 (2023: 283)  

May 2024: 360 (2023: 471)  

Jun 2024: 400 (2023: 387) 

Jul 2024: 342 (2023: 275)  

Aug 2024: 329 (2023: 396) 

Sep 2024: 291 (2023: 339) 

Oct 2024: 319 (2023: 379) 

Nov 2024: 316 (2023: 422) 

Dec 2024: Unavailable (2023: 367) 

Though results during 2024 varied month to month, insolvencies this time last year had increased compared to the year prior. 

Construction firms have been among the most adversely affected as part of the large wave of insolvencies across the UK in the years following the COVID-19 pandemic, with the issue seeming to persist even as the national figures flattened somewhat,” said Mark Supperstone, partner at business advisory firm, Evelyn Partners. 

“Additionally, the Labour government has ushered through several policies that could signal some improvement for local contractors, namely a commitment to 1.5 million new homes by 2029 and significant reforms to the UK planning system.  

“However, with recent BICS forecasts indicating a 17 per cent increase in building costs over the next five years, in addition to both Santander and HSBC having increased mortgage rates in recent weeks, there are clearly further issues to be addressed should corporate insolvencies in the sector begin to materially subside.” 

Subbies still worst hit  

Smaller specialist firms also continued to be overrepresented in the months preceding November 2024, with 182 failing out of 316 in November, 198 out of 319 in October, 158 out of 291 in September, 211 out of 329 in August, 192 out of 342 in July, 227 out of 400 in June, and so on. 

This trend is consistent with similar results reported last year. 

Construction firms in the UK have gone under at the highest rate in a decade, with more than 11,000 firms lost since 2021 as well as around 100,000 workers. 

“The outlook for the construction sector for 2025 remains opaque, with some grounds for optimism but persistent issues might delay any emergence of green shoots for a good part of the year,” Supperstone added. 

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If you have a tip or story idea that fits with our publication, please contact the news editor rory@wavenews.co.uk 

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