The rate of insolvency in construction companies continues to rise in July
UK construction company insolvency made up 15.2% of all insolvencies in both England and Wales in July, a rise of 2.5% from June.
However, this is also a drop of 3.5% year-on-year from July 2024.
Nearly 4,000 companies went under in a year
In the 12 months to July 2025, 3,973 construction companies entered insolvency. While is a decrease of 9.5% yearly from July 2024’s 4,389, it is an increase of 23.5% on 2019’s 3,218.
Monthly, specialist firms took the biggest hit with 195 recorded insolvencies.
While the numbers may seem bleak, it should be noted that the number of companies on the effective register is more than twice what it was during the 2008 recession, which saw the highest peak of insolvencies.
This means that, while insolvency rates are high for construction, there are more construction companies to make up the difference.
Analysis by EY Parthenon notes that there are many factors to consider both within and outside the UK, writing: “Unpredictable tariff policy, rising employment costs and shifting regulatory frameworks are reshaping corporate behaviour. As the second half of the year begins, sectors exposed to discretionary spending and policy-sensitive industries like healthcare, retail and energy also face mounting pressure.
“When everything feels like a risk, it becomes harder to know which threats matter most. Companies can’t react to every event, but the speed of change means that a ‘wait and see’ approach isn’t an effective long-term strategy either. Businesses need a measured, scenario-based approach that balances agility with strategic clarity to face ongoing uncertainty.”
Construction is third highest for administrations
Analysis by Shakespeare Martineau in July showed that, to July, 10% of all administrations in the UK were construction companies, making it the third worst-hit sector.
This marked a 11% decline year-on-year, but a 3% rise from 2023, showing a somewhat worse market condition.
Andy Taylor, partner and head of restructuring at Shakespeare Martineau, said: ““The North West becoming the worst-hit region is a significant shift. This suggests that distress is becoming more geographically widespread, no longer concentrated in Greater London and the South East. Local economic factors – including legacy pandemic debt, delayed investment and supply chain costs – continue to weigh heavily.
“These figures, while worthy of note, do not detract from the fact that the trading environment for many businesses remains highly challenging. Many companies are surviving through short-term fixes, but without sustained growth, improved consumer confidence and better access to funding, there are still choppy waters to navigate.”
You can read more on major companies falling into administration in 2025 here.
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