Latest figures show 40% rise in construction insolvencies during 2008
Eight construction companies are going insolvent every day, according to the latest data from accountancy firm PricewaterhouseCoopers (PwC).
According to its figures, 692 construction firms went into insolvency in the last quarter of 2008 – up 28% from 540 the previous quarter.
This took the annual total for 2008 to 2,100 construction insolvencies, a 40% jump on the previous year's figure of 1,500.
It was the highest level of insolvencies – which include liquidations, administrations, receiverships and voluntary arrangements – since PwC began tracking the statistics six years ago.
Jonathan Hook, PwC's construction and housebuilding leader, said: “It doesn't come as a major surprise and I would expect the trend will show further deterioration in 2009.
“The impact is across the sector. Even those contractors who are currently cash-rich need to be alert to the unwinding of cash flows on major projects and in particular the risk of financial failure in their supply chain.”