Construction insolvencies show seasonal dip, but significant viability challenges remain
Today’s company insolvency statistics show construction insolvencies decreased by 2.4% to 285 in September 2026, down from 292 in September 2025. Insolvencies across specialist construction activities ticked down to 168 in September 2026 from 170 in September 2025, making up 59% of all sector insolvency cases.
In the 12 months to September 2026, the construction sector experienced 3,873 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: “September’s fall in construction insolvencies, while positive, aligns with an established seasonal trend of numbers dropping in summer, and picking up again throughout autumn. Unfortunately, we are therefore likely to see a significant hike in October as we move away from the seasonal lull.
“While the government’s recent ‘Your First Home’ scheme and plans for new housing and infrastructure projects have boosted industry sentiment, it’s going to take time for these plans to translate into spades in the ground. In the meantime, cost pressures including high energy costs and rising inflation pile further pressure on the construction sector.
“The lack of visibility around timings for delivery of government infrastructure projects raises concerns around supply chain pressures and escalating build costs. This makes forecasting the viability of projects extremely challenging. Projects that are currently viable may not be in years to come, should mobilisation be delayed.
“In the short term, pipelines are healthy, with work delivering historic infrastructure projects and protecting revenue. However, the longer-term picture looks more challenging, with rising build costs and expected interest rate hikes leading to increasing nervousness around viability and access to affordable debt.
“Recent data from Glenigan’s Construction Review shows a concerning 26% decline in project starts compared to the preceding three months, as construction firms grapple with viability concerns, cost concerns and regulatory red tape.
“Signs so far suggest the Budget may be fairly bland for consumers, and individual households won’t feel the pinch. However, if cost increases come further down the track and interest rates rise, the pressure on household incomes along with a prolonged launch of the Your First Home support raises significant concerns for housebuilders that first time buyers will simply delay the decision to get onto the ladder. Construction businesses already battling with a skills shortage and aging workforce may also face pressure to review wage rates as the infrastructure pipeline mobilises and the workforce becomes further strained.
“Looking ahead, it’s essential the construction sector plans to secure its future workforce, ensuring the right skills are in place to deliver future pipelines. With many older workers reaching retirement, the sector is in danger of losing essential skills necessary to complete planned construction projects. Attracting the right skills to secure its future workforce is therefore paramount for the construction sector.”
James Hawksworth, Restructuring Advisory Partner at RSM UK added: “The headline insolvency figures mask continued pressure further down the construction supply chain. Specialist construction activities represented 59% of all construction insolvencies in September, their highest proportion for over a year. Combined with 21 consecutive months of a headline Construction PMI reading below 50, this suggests the sector is facing entrenched pressures rather than a temporary downturn.
“The latest data for winding up petitions show that one in four petitions issued by trade creditors in the UK are issued in the construction sector, demonstrating that businesses no longer have the capacity to absorb slow payment and increase working capital stretch. Although insolvencies have dipped slightly, the level of creditor action suggests cash-flow pressure remains firmly embedded across the sector, particularly within the supply chain.”