Almost a quarter of compulsory liquidations came in the construction sector

state of play

Over 6,000 construction firms have gone out of business since September 2010, analysis by risk management firm CR Management has found.

CR Management found 6,146 businesses went under in the sector, with 868 firms going bust in the last reported quarter to June, according to the firm’s analysis of National Insolvency Service figures.

Construction firms made up 23% of the total number of all businesses in England and Wales forced into compulsory liquidation since September 2010.

Over the period there was a 12% rise in compulsory liquidations of construction firms, whereas there was a 13.9% drop across all other business sectors.

Alan Harris, director at CR Management, said: “Over the past quarter it has been noticeable that the companies becoming insolvent are of a larger size and hence are having a greater impact on the market. 

“In particular a number of mechanical and electrical contractors have ceased trading, putting increasing pressure on main contractors to find replacement subcontractors who will guarantee the original work.

“This also puts increasing pressure on programme times leading to the possibility of projects falling behind and all of the cost ramifications this carries.”