Biggest Monthly Rise in Construction Insolvencies Since April 2024

CONSTRUCTION insolvencies rose by 19.9% in February 2025, the biggest monthly rise since April 2024.

The latest figures from The Insolvency Service show construction firms accounted for 19.5% of all insolvencies in England and Wales in February 2025, with 367 registered construction businesses becoming insolvent.

Insolvencies among firms classified as providing specialised construction activities contributed significantly, reaching a six-month high and increasing by 17% on the previous month.

By rough comparison, construction firms accounted for 14% of all registered businesses in the UK in 2024.

Year-on-Year

The total number of construction firms becoming insolvent in the 12 months to the end of February 2025 was 4,046. This was an 8.5% decrease on the 4,424 insolvencies recorded in the year to February 2024, and a 25.8% increase on the 3,217 in pre-pandemic 2019.

Of all cases where the industry was captured in the statistics, construction experienced the highest number of insolvencies in the year to February 2025.

The Insolvency Service said while the insolvency rate has increased since the lows seen in 2020 and 2021, it remains much lower than the peak of 113.1 per 10,000 companies seen during the 2008-09 recession. This is because the number of companies on the effective register has more than doubled over this period. The rate in the year to the end of March 2025 was 53.1 per 10,000 companies.

Scotland Insolvencies

In Scotland, there were 16 construction company insolvencies in March 2025, accounting for 13.6% of all insolvencies in the country. This was one less than in February 2025, and two fewer than in March 2024.

The total for the 12-month period to March 2025 was 194, which was nine fewer than the 203 insolvencies in the year to March 2024, and a 6.3% decrease on the 207 in pre-pandemic 2019.

Within the industry, firms classified as providing specialised construction activities are consistently the most affected across Great Britain. However, analysis shows that their numbers are proportional to their overall share within the construction sector.

This category includes companies providing a range of work, typically on a subcontract basis, from demolition and site preparation to electrical and plumbing installation, and finishing work like plastering, painting and glazing.

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