Construction insolvencies jump as pressures ramp up
Today’s company insolvency statistics show construction insolvencies ticked up 14% to 347 in March, from 301 in February 2026.
The construction industry experienced the highest number of insolvencies of any industry in the 12 months to March 2026 at 3,827, making up 16% of all insolvencies across the economy.
Commenting on the latest construction industry statistics, James Hawksworth, Restructuring Advisory Partner at RSM UK said: “Today’s figures demonstrate the construction sector’s vulnerability to the economic impact of ongoing geopolitical tensions. The first three months of 2026 saw the highest number of winding up petitions issued by trade creditors since the financial crisis, a clear signal of significant underlying pressures in the sector. These pressures are now being exacerbated by the impact of the Iran war, with the latest PMI figures for April showing the largest month-on-month input cost inflation increase since records began in 1997.
“High energy prices and increasing material costs are hitting the supply chain, further squeezing already tight margins, as the ongoing economic uncertainty knocks investor appetite. Whilst some larger businesses are now feeling the impact of these headwinds, it is the smaller or specialist construction businesses in the supply chain that are feeling the pain most keenly.
“Smaller or more specialist firms do not have the leverage to negotiate worsening credit terms with the larger contractors, nor have the agility to cope with significant price increases or project delays. In March, these smaller suppliers suffered a 23% increase in insolvencies, with the number rising to 193 from 157 in February 2026.
“As businesses now contend with heightened cost pressures and uncertain economic conditions, and no clear indication of when these headwinds will ease, a further spike in insolvencies over the coming months is likely even if the geopolitical position stabilises in the coming weeks.
“Pipelines for the sector have been strong, particularly in the case of large infrastructure and defence projects. However, with persistent concerns around supply chain volatility, working capital pressures, access to affordable debt and the overall viability of some projects, there is little in terms of reassurance for construction businesses.”