The construction sector saw the highest number of company insolvencies in the first quarter of the year, despite numbers falling year-on-year, latest data from the Insolvency Service has shown.
In total 672 construction firms went bust in England and Wales between January and March, outstripping other sectors such as the ‘wholesale and retail trade; repair of motor vehicles and motorcycles’, which at 537 firms came second. Administrative and support service activities, accommodation and food service activities, and manufacturing followed, allowing the five sectors to take the top spots for the fourth year running.Companies become insolvent when they are unable to pay debts and enter liquidation, administration or any other company rescue process. Construction also topped the twelve-month period ending in Q1, after posting a total of 2,461 insolvencies, albeit this was down 0.3% on the previous 12-month period ending in Q4, when it saw 2,469 firms go out of business.
The sector saw fewer insolvencies than it did in the same period last year, however, it topped all three quarters after. Firms engaging in specialised construction activities suffered most, with 414 firms going out of business in Q1 alone. These are business mainly involved in demolition, construction installation or building completions. They were followed by builders, which lost 216 firms in the three-month period and civil engineers, of whom 42 went bust.
Of the liquidations of construction firms in Q1, 156 were compulsory, with firms providing specialised construction activities most likely to be wound up by the courts (86 firms), while 58 builders were forced to liquidate.
In contrast, 444 firms chose to enter liquidation voluntarily in Q1. Meanwhile, the number of firms entering administration in the period stood at 54, slightly down on the 57 filing in the same period last year but eclipsing every quarter thereafter.