Construction industry insolvencies in 2024 fell eight per cent compared to the year previous, despite the industry experiencing the highest number of insolvencies of any sector.
The number of construction companies of various sizes that went out of business in the UK in the year to December 2024 was 4,032, according to recent findings by the Insolvency Service.
However, this number is 8.1 per cent less than a year ago and the number of firms going out of business in December also dropped 30 per cent from 316 firms in November 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: 219 (2023: 422)
Construction continues to be the worst-hit, accounting for 17 per cent of cases, 12.8 per cent than the next highest sector: wholesale and retail trade; repair of motor vehicles and motorcycles.
The last time construction fell below the highest number of insolvencies was the year ending Q3 2017.
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.
Of the total number, 2,564 (63.59 per cent) were specialist sub-contractors, whereas 1,484 (36.81 per cent) were main building contractors.
Of the 291 construction firms that went out of business in the UK in August this year, 174 were smaller companies.
This trend is consistent with the months preceding December 2024
- November 2024: 182 of 316
- October 2024: 198 of 319
- September 2024: 158 of 291
- August 2024: 211 out of 329
- July 2024: 192 of 342
- June 2024: 227 out of 400
Kelly Boorman, national head of construction at accounting and auditing company RSM UK, said: “The latest rise in construction insolvencies shows the extent of the debt burden and distress in the supply chain.
“We’ve seen the volume of mergers and acquisitions (M&A) transactions jump sharply in the industry, reflecting the challenges of an aging workforce and a lack of investment in technology to fill the labour gap.
“Much of this M&A activity is to consolidate existing workforces, but businesses also need support to raise working capital and attract skilled labour to ensure long-term growth.
“There are concerns that even with government intervention, this isn’t enough to enhance the industry’s skilled workforce and address the 250,000-person labour gap.”
“We’re also seeing a lag in mobilisation of large infrastructure projects, meaning the pace of project starts is causing some frustration.
This could prove difficult to manage as consolidation and an aging workforce will put strain on delivery.
“Industry urgently needs incentivisation to invest in technology, improved access to working capital, and acceleration of skilled workers to ensure targets are realised.”
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