Construction insolvencies hit 12 month high

Latest data from the Insolvency Services has shown that the construction industry experienced the highest number of insolvencies in the 12 months to August 2026, at 3,873, making up 17% of all industry cases.

Carly Thorpe, Construction & Engineering Partner at Walker Morris, said, “Despite continuing to experience the highest number of industry insolvencies, there are green shoots emerging in construction. This is most prominent in areas such as infrastructure, transport, energy and other major public sector projects, where contractors are increasingly looking to secure longer-term pipelines of work.

“Frameworks across areas such as education, healthcare, transport and defence are becoming increasingly sought after, alongside alliancing arrangements that bring contractors together to collaborate on the delivery of programmes of work. For construction businesses, these models can provide greater certainty and visibility over future workloads at a time when cash flow and margins remain under pressure.

“The picture remains more challenging in the residential market, where viability pressures continue to weigh on new development. All eyes will therefore be on the Budget and whether measures such as the proposed Your First Home scheme can help stimulate the market and give investors greater confidence to commit to residential projects.

“While a stronger pipeline of work is encouraging, it does not remove the financial pressures facing the sector. Construction businesses still need to be selective about the projects they take on and ensure they are commercially sustainable. However, greater certainty through long-term frameworks, coupled with measures that can unlock residential investment, could help create a more stable outlook for the sector.”