Year-on-year downtick in construction insolvencies masks significant pipeline pressures
Today’s company insolvency statistics showed that the construction sector experienced 309 insolvencies in June 2026, down 4.9% from 325 in June 2025. However, the figures for June mark a month-on-month increase of 4.4%, up from 296 in May, as the industry braces for further uncertainty amid news of a change in government leadership.
The construction industry experienced the highest number of insolvencies of any industry in the 12 months to June 2026 at 3,805, making up 17% of all insolvencies across the economy.
Kelly Boorman, National Head of Construction at RSM UK said: “While today’s figures show a marginal year-on-year decrease in construction insolvencies, the monthly increase shows that the sector is not out of the woods, with political uncertainty and macroeconomic pressures suggesting more troubling times ahead. Lack of visibility across the supply chain remains a key challenge for businesses, with uncertainty around long-term projects. While pipelines in the short-term appear stable, the change in government leadership has driven greater uncertainty over future policy, infrastructure spend and housing incentives, dashing hopes of a more settled outlook.
“Subdued volumes of work have raised concerns over debt affordability and access to working capital, with many construction businesses having to restructure their debt with tightening headroom and contracting revenues forecast. Businesses looking to restructure amid shrinking pipelines need to navigate conflicting needs of reducing labour costs in the short-term, without hampering activity further down the line when house building volumes pick up and major projects mobilise. The lack of clarity over future activity and timelines creates a dilemma for the industry around labour and sub-contractor retention.
“The government has said it will explore the potential to create a state-owned housebuilder to support the construction workforce through subdued market conditions. While this is a welcome measure which would aid the delivery of homes, the implementation of this is likely to be a lengthy and highly complex process, delaying the stimulation in the market that was needed months ago. There remains a vital need for short-term support for the sector, particularly as continuing conflict in the Middle East and potential policy and budget changes create further uncertainty around when pressures will ease.”
James Hawksworth, Restructuring Advisory Partner specialising in the Construction sector at RSM UK added: “The construction supply chain continues to bear most of the pressure in the sector, with 56% of construction insolvencies relating to specialised construction activities. This is supported by the number of winding up petitions being issued across the sector in the first six months of 2026, which represented the second highest six-month period on record. This suggests the balance sheets of companies in the construction sector no longer have the resilience to sustain slow payment by their customers and are pursuing outstanding debts more aggressively than ever before.”