Construction continued to record the highest number of company insolvencies of any industry in the latest figures from The Insolvency Service, although insolvencies across the sector have fallen compared with the previous 12 month period.
There were 3,841 construction company insolvencies in the 12 months to July 2026, accounting for 17% of all cases where an industry was identified.
The figures nevertheless show that construction insolvencies have declined over the preceding 12 month period, meaning the sector’s position in the industry with the highest number of insolvencies doesn’t indicate that failures are currently increasing.
Alex Rogan, Insolvency and Restructuring Partner at law firm Richardson Lissack, says: “While the overall number of construction insolvencies has fallen, the sector continues to account for the highest number of company failures, highlighting the scale of the financial pressures businesses have been navigating.
“Strong order books do not necessarily translate into financial security – contractors can still find themselves under pressure where projects are being delivered on margins that no longer reflect the cost and risk involved. Fixed-price contracts, rising labour and material costs and unattractive payment terms can leave smaller businesses with very little room to absorb further pressure.
“Turnover and workload can mask financial distress – as a company’s position deteriorates, the focus needs to move beyond completing the next project to understanding whether it remains viable. Those best placed to withstand the current environment will be those that understand the financial risks attached to the work they take on, rather than simply how much work they have. For directors, the important point is to recognise when a temporary squeeze is becoming a structural problem and act while there are still realistic options available to maximise value.”
The wider company insolvency figures show 1,931 across England and Wales in July 2026, 5% higher than in June but 5% lower than July 2025.
