There was an uptick in the number of construction companies going under in England and Wales in February this year, following a period of relative decline in monthly insolvencies.
The construction sector witnessed an 8.7 per cent rise in insolvencies in the second month of 2026, with 301 businesses disappearing from the landscape.
Of that number, more than half (157) were smaller, specialist firms and sub-contractors, a trend consistent with previous reporting periods when the sector was beset by a myriad of challenges including a downturn in activity and sluggish approval system.
Indeed, construction bore the highest number of insolvencies of any UK sector in the 12 months to February this year (3,851), with notable spikes in May (385) and October (366) of 2025, accounting for 17 per cent of all insolvencies in England and Wales.
During that time, however, it also should be noted there had been a general decline in the number of construction companies failing in the 12 months leading up to February of this year, culminating in 277 closures in January.
February’s increase returned sector insolvency to similar levels as seen in November of last year.
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Mark Supperstone, partner at S&W, a UK accountancy firm, said this change in course should not come as a surprise, adding it simply indicated a broader picture of “continued fragility” as smaller firms continue to operate with little headroom, amid planning bottlenecks and cash flow and labour pressures more generally.
RSM national head of construction, Kelly Boorman agreed construction SMEs making up the bulk of insolvencies was consistent with previous periods, adding main contractors battling macro and geo-political struggles could just push costs and risks down the supply chain.
“Extensive supply chains, low margins, extended working capital cycles, high debt burdens now subject to increased energy and material prices, along with uncertainty around mobilisation of pipeline places businesses in the industry at higher risk of insolvency,” said Boorman.
“Less agile, undercapitalised supply chains have little scope for resilience against price increases and project delays.”
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