Construction insolvencies: Bigger pipelines and market optimism drives concern around supply chain capital
In November 2025, the number of registered company insolvencies in England and Wales was 1,866 an 8% decrease on October 2025 (2,029) and just above November 2024 (1,747).
The construction industry experienced the highest number of insolvencies in the 12 months to November 2025 at 3,973, making up 17% of all industry cases.
Commenting on the latest construction insolvency statistics, Kelly Boorman, National Head of Construction at RSM UK, said: “The Chancellor reconfirmed government’s determination to accelerate the delivery of major infrastructure projects and housebuilding. With contractors securing significantly increased pipelines, concern remains around the fragile supply chain. There’s a big question over whether it will cope with a potentially rapid increase in demand, with labour shortages and a tightening of access to debt to support working capital.
“There’s also an over-reliance on the supply chain to deliver the high volume of projects in the pipeline, which means suppliers may find themselves spread too thinly, creating further tension on project delivery deadlines. This issue may be exacerbated if any of the large suppliers fail in future, resulting in delays and a fall in margins which are already squeezed.
“Housebuilding volumes have increased slightly since the Autumn Budget brought some much-needed certainty, and we are also now seeing more developers wanting to sell. As interest rates decrease, mortgages are becoming more affordable, which should help drive further consumer demand.
“Looking ahead, while we are now seeing mobilisation of major projects happening, and improved optimism throughout the market, a lack of access to affordable debt to support increased working capital is an issue, and we expect to see insolvencies spike in quarter two as a result of over trading.”
James Hawksworth, construction specialist in RSM UK’s restructuring advisory team, added: “Although the headline insolvency numbers are down in November, administration insolvencies in November actually increased by 12%. This is a strong indicator that the level of stress for medium to larger scale businesses remains high. The most recent construction sector data for October shows a monthly increase in construction insolvencies of 24%, from 291 insolvencies to 360. This is likely to be driven by the high material prices and increasing labour costs. This is creating a perfect storm for the sector, when combined with project delays placing intense pressure on working capital, and lenders being cautious about advancing funds to the sector.”