Construction Business Failures Rise as Most Administrations Filed Since 2010

Business failures in the construction industry have continued to rise, with 88 companies filing for administration in the first six months of 2026 – an 11% increase from the 79 recorded during the same period in 2025, according to analysis by national law firm Shakespeare Martineau.

Analysis of data from The Gazette Official Public Record showed that the construction industry was the UK’s fifth worst-hit sector for administrations during the first half of 2026, behind the real estate (336), retail (142), manufacturing (102) and hospitality (99) sectors.

Ruth Phillips, Construction Partner at Shakespeare Martineau, said: “The increase isn’t surprising given the perfect storm facing the construction industry.

“Rising costs, ongoing geopolitical uncertainty affecting energy prices and a payment culture that continues to strangle working cashflow in the supply chain have left many businesses under real strain.

“Specialist subcontractors and SMEs remain particularly exposed because they often don’t have the financial resilience to absorb delayed payments or cost overruns on fixed-price contracts.

“With the government’s proposed reforms to tackle late payment, there is a glimmer of hope for the sector. However, this will take time to implement.

“In the interim, firms must keep a close eye on cashflow, be disciplined about the work they take on and avoid pricing contracts that leave no room for rising costs.”

Most Administrations Filed Since 2010

The figures form part of a wider national picture, which saw UK administrations reach their highest level since 2010.

Across the country, 1,159 companies entered administration in the first six months of 2026 – a 48% increase from the 783 recorded during the same period in 2025. The total also marks the first time administration volumes have exceeded pre-pandemic levels (940 in 2019).

Andy Taylor, partner and head of restructuring at Shakespeare Martineau, said: “This analysis represents a significant and worrying shift. For the first time since the pandemic, business failures have not only risen sharply but have surpassed pre-Covid levels – highlighting just how difficult the current trading environment has become.

“Many businesses have spent the past few years absorbing higher borrowing costs, inflationary pressures and increased operating expenses.

“The sheer scale of the increase suggests many businesses have simply run out of options. Companies that have survived several years of sustained pressure are finally reaching a tipping point.”

Andy warned businesses to act early if they encounter financial distress.

He said: “Our advice remains unchanged – seek professional advice early. Directors who act at the first signs of financial difficulty have far more options available to restructure, protect value and, where possible, rescue the business. Waiting until cashflow becomes critical can significantly reduce those options.”

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