Construction industry remains cautious as insolvencies rise in February
In February 2025, the number of registered company insolvencies in England and Wales was 2,035, 3% higher than in January 2025 (1,978) but 7% lower than in February 2024 (2,188).
The construction industry experienced the highest number of insolvencies in the 12 months to January 2025 at 4,031, making up 17% of all industry cases.
Commenting on the latest construction insolvency statistics Kelly Boorman, national head of construction at RSM UK, said: “Construction continues to experience the highest number of insolvencies above any other sector, which is to be expected given the ongoing burden of expensive debt and fragile supply chain. We are seeing a strong pipeline of work, however we’re not seeing the volume of delivery increase due to delays in mobilisation and the financial constraints, along with uncertainty in the aftermath of the Autumn Budget. Businesses are therefore preserving working capital and are yet to see the growth they anticipated in 2025. One of the main financial challenges for construction is the incoming increase to employers’ NIC. The industry is already under-resourced, and the increase to labour costs will squeeze margins.
“However, the UK is recognised by overseas investors as a good place to do business, especially in the real estate market. As a result, the construction industry has reason to be cautiously optimistic, buoyed by private and infrastructure investment. But, progress is limited by high borrowing costs, political uncertainty, and regulatory challenges. This has a knock-on impact on the supply chain, which remains fragile due to lack of mobilisation and availability of reasonably priced debt. The sector is likely to see more casualties before it improves, and we expect delivery of projects to accelerate towards the back end of 2025, 12 months later than forecast.”
She added: “But, last week marked a significant step as the government announced updates to its Planning and Infrastructure Bill. These changes will remove red tape, streamline planning, and accelerate decision-making, reducing administrative delays. They will also empower local authorities to have more control over infrastructure projects, ensuring better allocation of resource to meet local demand. While this is a promising development, it will take some time to materialise and it’s important the government considers the role of technology in accelerating delivery in the run up to the Spring Statement.