Construction Insolvencies Up in May but Down on Previous Year

CONSTRUCTION FIRMS accounted for 17.2% of all insolvencies in England and Wales in May 2025, according to the Insolvency Service, with 385 registered construction businesses becoming insolvent.

This was an 18.5% increase on April 2025 with 60 more insolvencies occurring in May.

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

The largest proportion of construction insolvencies (190) were among firms classified as providing specialised construction activities. This group experienced a decrease in the number of insolvencies in May on the previous month while civil engineering insolvencies rose to their highest level in more than one year.

Year-on-Year

The total number of construction firms becoming insolvent in the 12 months to the end of May 2025 was 4,056. This was a 5.8% decrease on the 4,305 insolvencies recorded in the year to May 2024, and a 26.0% increase on the 3,218 in pre-pandemic 2019.

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 June 2025 was 52.4 per 10,000 companies.

Scotland Insolvencies

In Scotland, there were 23 construction company insolvencies in June 2025, accounting for 21.9% of all insolvencies in the country.

This brought the total construction insolvencies in Q2,25 to 65 – a 47.7% increase on the 44 seen in Q1,25 and the highest quarterly total on record in the last three and a half years of readily available data.

The number of Scottish construction insolvencies for the 12-month period to June 2025 was 204. This was the same as seen in the year to June 2024, and a 1.5% decrease on the 207 in pre-pandemic 2019.

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