Construction firms accounted for 16% of all insolvencies in England and Wales in March 2026, according to The Insolvency Service, with 347 registered construction businesses becoming insolvent.
This was 43 more than were recorded in February 2026 and 30 fewer than the 377 in March 2025.
By comparison, construction firms accounted for 14%) of all registered businesses in the UK as of September 2025.
The largest proportion of construction insolvencies were among firms providing specialised construction activities with 193 recorded in March – the highest number since October 2025.
The total number of construction firms becoming insolvent in the 12 months to March 2026 was 3,827. This was a 7% decrease on the 4,112 insolvencies recorded in the year ending in March 2025 and a 19% increase on the 3,221 in pre-pandemic 2019.
Dr David Crosthwaite, chief economist at BCIS, said: ”While the annual picture shows some improvement, insolvency levels across construction remain historically high and continue to reflect the difficult trading environment many firms are operating in.
“Persistent cost pressures, tight margins and cash flow challenges are still affecting businesses across the supply chain, particularly specialist contractors who are often most exposed to fixed-price contracts and payment delays.
“‘Realistically, further pressure is still to come, as rising energy, transport and material costs associated with the conflict involving Iran continue to work their way through global supply chains and into construction pricing.”
Of all cases where the industry was captured in the statistics, construction experienced the highest number of insolvencies in the year to March 2026.
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 April 2026 was 51.8 per 10,000 companies.
In Scotland, there were 19 construction company insolvencies in April 2026, 5 fewer than in March 2026, accounting for 18% of all insolvencies in the country.
The number of Scottish construction insolvencies for the 12-month period to April 2026 was 194, just one more than the 193 in the year to April 2025, and a 6% decrease on the 207 in pre-pandemic 2019.
Within the industry, firms classified as providing specialised construction activities are consistently the most affected across Great Britain. However, analysis shows that their numbers are proportional to their overall share within the construction sector.
This category includes companies providing a range of work, typically on a subcontract basis, from demolition and site preparation to electrical and plumbing installation, and finishing work like plastering, painting and glazing.
The Insolvency Service also publishes figures for Northern Ireland, but not with sector breakdowns.
The latest analysis of profit warnings issued by listed construction companies by EY-Parthenon suggests that, although the first quarter of 2026 was more promising, ongoing geopolitical uncertainty continues to pose a risk to the sector’s outlook.
FTSE Household Goods and Home Construction firms, which include housebuilders, issued four warnings in 1Q2026. EY-Parthenon’s report also revealed that five of the 12 warnings issued by the sector in the 12 months to 1Q2026 came from housebuilders. Commentary pointed to extended sales cycles and limited forward visibility as key constraints with housebuilders expected to remain under pressure from high mortgage rates, weak sentiment and elevated build and financing costs.
A multitude of factors feed into company insolvency, though analysis of profit warning data by EY suggests the construction industry is particularly exposed to financial difficulty.
This is in part due to the nature of contract cycles and the challenges of cash flow management that contractors and subcontractors are subject to.
