Rising insolvency share in July

Construction firms continued to face financial strain inJuly, accounting for 15.2% of all insolvencies in England and Wales. Thisrepresented a 2.5% increase from June, though still 3.5% lower than July 2024.

Nearly 4,000 firms lost in 12 months

In the year to July 2025, 3,973 construction companiesentered insolvency. While this marked a 9.5% decline compared with the 4,389failures recorded a year earlier, it remains 23.5% higher than the pre-pandemicfigure of 2019. Specialist firms were hardest hit, with 195 insolvencies inJuly alone.

Although concerning, analysts note that the number ofregistered construction businesses is now more than double that seen during the2008 financial crisis, meaning the current insolvency peak affects a broaderbase.

Wider pressures on the sector

There are multiple risks influencing company stability,including unpredictable tariffs, rising employment costs and shiftingregulation. It has been cautioned that businesses cannot rely on a “wait andsee” approach and instead require agile, scenario-based strategies to navigateuncertainty.

Construction among worst hit for administrations

Analysis from Shakespeare Martineau revealed thatconstruction accounted for 10% of all UK administrations up to July, ranking itthe third most impacted sector. While this figure represented an 11%year-on-year fall, it was still 3% higher than 2023.

The firm also noted that the North West had overtaken Londonand the South East as the hardest-hit region, suggesting financial distress isspreading more widely across the country. Legacy pandemic debt, supply chainchallenges and delayed investment continue to weigh heavily on many firms.