Construction Insolvencies Top Sectors but Down on Previous Year

Construction firms accounted for 16.4% of all insolvencies in England and Wales in 2025, representing a larger share than any other sector.

A total of 3,931 registered construction businesses became insolvent last year, according to new data from The Insolvency Service – a decrease of 2.7% on the total in 2024.

Alongside construction, wholesale and retail trade; repair of motor vehicles and motorcycles; and accommodation and food service activities were the only sectors to experience more than 3,000 insolvencies in 2025.

For context, construction firms accounted for 14% of all registered businesses in the UK in 2025.

Within construction, the largest proportion of insolvencies were among firms providing specialised construction activities with 2,208 recorded last year.

This was 134 fewer than in 2024 and 277 more than in pre-pandemic 2019.

Scotland Insolvencies

In Scotland, construction firms accounted for 15.0% of all insolvencies in 2025 with 191 registered businesses in the sector becoming insolvent.

This was 11 fewer than the total in 2024 and 16 less than in pre-pandemic 2019.

Again, firms providing specialised construction activities experienced the largest share of insolvencies in the sector with 124 recorded.

Monthly Outlook

On a monthly basis, 16.6% of all insolvencies in England and Wales in December 2025 were in construction with 266 recorded.

This was the lowest monthly level in the last four years of available data.

Compared with November 2025, insolvencies in December decreased by 34 and by 27 on the year. Firms providing specialised construction activities comprised the largest share of insolvencies with 156 – two fewer than November’s total and 17 less than the amount seen in December 2024.

The Insolvency Service said that 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 January 2026 was 51.7 per 10,000 companies.

In Scotland, there were eight construction company insolvencies in January 2026, four less than the 12 recorded in December 2025 and accounting for 10.8% of all insolvencies in the country.

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