Construction Insolvencies Record Lowest Level Since July 2023

CONSTRUCTION FIRMS accounted for 15.0% of all insolvencies in England and Wales in August 2025, with 290 registered construction businesses becoming insolvent.

According to The Insolvency Service, this was the lowest level recorded since July 2023 and a 12.7% decrease on the construction insolvencies seen in the previous month. On the year, the sector’s insolvencies fell by 11.9%.

By rough comparison, construction firms accounted for 14.0% of all registered businesses in the UK in 2024.

The largest proportion of construction insolvencies were among firms providing specialised construction activities with 178 recorded – 17 less than the number seen in July.

Year-on-Year

The total number of construction firms becoming insolvent in the 12 months to the end of August 2025 was 3,934. This was a 9.0% decrease on the 4,322 insolvencies recorded in the year ending in August 2024, and a 22.3% increase on the 3,218 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 August 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 September 2025 was 52.9 per 10,000 companies.

Scotland Construction Insolvencies

In Scotland, there were 14 construction company insolvencies in September 2025, accounting for 13.6% of all insolvencies in the country.

The number of Scottish construction insolvencies for the 12-month period to September 2025 was 193. This was a 4.0% decrease on the 201 recorded in the year to September 2024 and a 6.8% fall 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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