Construction Insolvencies Up With More to Come for Supply Chain

THE NUMBER OF CONSTRUCTION companies entering insolvency in Great Britain hit a seven-year high in 2019 according to the latest data released by the Insolvency Service. The effects of the bankruptcies are now set to ripple down the supply chain in the coming months.

In total, a reported 646 construction companies became insolvent in England, Wales and Scotland during 2019, up 19% on 2018’s 542 insolvencies, and the highest since 2012 which saw 946 construction insolvencies.

Data from the Insolvency Service

In the fourth quarter of 2019, 157 companies became insolvent, up 15% from 136 in the same quarter in 2018, but just 1.2% higher than the 155 companies that became insolvent in the third quarter of 2019.

Further insolvencies

Further rises in insolvencies may be on the cards in the coming months as cashflow problems caused by the slowdown at the end of 2019 are slowly passed down the supply chain.

Data from The Insolvency Service

Prof. Noble Francis, Economics Director at the Construction Products Association said: “Some good family run contractors have been going under in the last 12 months.

“Construction insolvencies tend to peak in the first half of the year, after cash flow issues following year end and financial year end, so expect construction insolvencies to rise in the first half of 2020.”