Construction insolvencies rise year-on-year as sector feels the sting of long-term uncertainties
Today’s company insolvency statistics show construction insolvencies increased marginally by 0.7% to 294 in August 2026, from 292 in August 2025. Insolvencies for specialised construction activities decreased to 164 in August 2026, down from 179 in August 2025, but continued to account for over half (55.7%) of insolvencies in the sector.
In the 12 months to August 2026, the construction sector experienced 3,866 insolvencies, making up 17% of all insolvencies across the economy, the highest of any sector.
Commenting on the latest figures, Kelly Boorman, head of construction at RSM UK said: “Long-term uncertainty over future pipeline allocation and mobilisation, along with macro-economic conditions, is weighing heavily on the construction sector as rising inflation, energy price volatility and the potential for interest rate hikes later in the year fuels concerns around financing and funding. Many construction firms, particularly housebuilders, are restructuring to manage delivery and protect margins amid expectations of continuing economic challenges.
“There are signs of short-term market health, as businesses continue to deliver on secured pipelines. However, the long-term outlook faces uncertainty around when and where major infrastructure spend will be allocated. Housing volumes also remain challenged with private residential demand declining further and social housing funders seeing funding structure changes, and major developers are announcing cuts to their housebuilding targets. As concerns over demand and project viability ramp up, pressure builds throughout the supply chain around activity volumes and debt affordability and servicing.
“Unfortunately, as the sector braces for winter weather, further uncertainty over policy and high energy prices pushing inflation to over 4%, we could see the upward trend in sector insolvencies continue in the coming months. Businesses continue to proactively restructure to boost resilience and relieve pressure on margins, but greater clarity around major project spend and timelines, along with access to affordable debt, will be crucial to enable businesses to plan and adequately scale, securing long-term viability.”