The number of insolvencies in the construction sector dropped in November, offering a hopeful sign of “stabilisation” after a period of fluctuating failures across the industry.
In November, 297 construction firms went into insolvency, down from 362 in October and 321 in the same month the year before.
The breakdown in figures from the Office for National Statistics (ONS) includes 158 specialist contractors, 123 building companies, and 16 civil engineering firms.
The sector continued to lead all industries in insolvencies over the past 12 months, with 3,950 construction firms collapsing out of a total of 23,938 companies, more than any other industry at 17 per cent.
It has seen fluctuating insolvency figures since the pandemic, with more than 4,000 firms failing annually, however, the latest drop in insolvencies signals a potential recovery, offering some optimism for the sector for the current 2026 year.
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Jo Streeten, managing director at AECOM (Building + Places), said: “A fall in construction insolvencies this month, with levels lower than both last month and this time last year, is a surprising but welcome sign of stabilisation across the sector as we enter 2026.
“Winter is always a challenging period, with fewer contracts being signed and tighter cashflow, which makes it all the more important that planning, procurement and payment processes continue to run smoothly.”
She added: “Against that backdrop, major commitments such as Northern Powerhouse Rail are a positive signal for the industry, reinforcing the importance of long-term certainty and a visible pipeline of work.
“Turning that intent into delivery will be key to sustaining confidence and supporting resilience across the supply chain.”
David Baxendale, restructuring partner at PwC, noted that while the overall trend for insolvencies remained high, November’s figures indicated a small but encouraging reduction.
He said: “The Insolvency Service’s latest statistics for December 2025 reveal a small decrease when compared with the previous month. Total company insolvencies were 1,802, compared with 1,990 in November and 2,177 in October.”
Baxendale also highlighted ongoing challenges, including rising interest rates and inflation, as well as fragile demand in the face of weak consumer and business sentiment.
He concluded: “The patterns we’re seeing in insolvency levels, company size and sector impact are consistent with recent years and given the current landscape, are likely to continue into the early months of 2026.”
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