Eight construction companies were going insolvent every day in the last quarter of 2008, Pricewaterhouse Coopers has revealed

According to the consultant’s figures, 692 construction firms went bust 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 and the highest level since PwC began tracking these statistics six years ago.

The term insolvency covers liquidation, administration, receivership and voluntary arrangements.

Jonathan Hook, head of construction and housebuilding at PwC, said: “It doesn’t come as a major surprise and I expect there will be 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.”

The plight of small and medium-size companies has been compounded in recent months by a lack of credit and shrinking debt facilities from lenders.