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Construction Sector Still Feeling the Strain: September 2025 Insolvency Update
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Construction insolvencies remain high as overall UK insolvency levels stabilise in September 2025.
Overview
The latest figures from the Insolvency Service show that business failures across England and Wales remain stubbornly high, and construction continues to feel the brunt.
With 2,000 registered company insolvencies in September 2025, levels are holding steady compared to both August (2,046) and the same month last year (1,967).
While this stability might seem encouraging, insolvency volumes across the first nine months of 2025 remain slightly higher than in 2024 and broadly in line with 2023, a year that marked the highest insolvency total in over 30 years.
Headline figures at a glance
| Total Insolvencies | Compulsory Liquidations | CVLs | Administrations | CVAs | |
| vs Sep 2024 | +2% | +17% | +1% | −17% | 0% |
| vs Aug 2025 | −2% | −9% | −1% | +2% | +6% |
- 2,000 company insolvencies were registered in September 2025
- Comprising 281 compulsory liquidations, 1,578 creditors’ voluntary liquidations (CVLs), 124 administrations, and 17 company voluntary arrangements (CVAs)
- One in 189 companies on the Companies House register entered insolvency in the year to September 2025, a rate of 52.9 per 10,000 companies
- This is slightly down from 55.0 per 10,000 in the 12 months to September 2024
- The construction sector continues to experience the highest insolvency levels, accounting for 17% of all cases over the past year
Construction: still under pressure
Construction remains the hardest-hit sector, with 3,934 insolvencies recorded in the 12 months to August 2025, 17% of all UK business failures.
The sector continues to struggle under the weight of rising costs, tight margins, and persistent payment delays. Many firms are still feeling the knock-on effects of fixed-price contracts signed during the volatile 2022–23 period, where material and labour costs rose sharply.
While overall insolvency numbers have steadied, there’s little doubt that cashflow challenges continue to test even long-established businesses. Late or failed payments up the supply chain remain a major contributing factor.
A longer-term view
It’s worth remembering that while insolvency numbers remain elevated, they’re still far below the 2008–09 recession peak, when 113.1 companies per 10,000 failed.
The number of active companies has more than doubled over that period, which means that while the rate of insolvency is lower, the real-world impact, particularly for those in construction, remains significant.
The positive takeaway is that the rate of increase appears to be slowing, hinting that the sector may be moving into a more stable phase, even if pressures persist.
Practical steps for construction firms
Periods like this underline the importance of strong credit management and early debt control. Proactive firms can significantly reduce their risk of loss through the following actions:
- Keep credit data up to date: Regular checks on clients and suppliers can flag early signs of distress.
- Monitor payment behaviour closely: Sudden changes in payment patterns can signal emerging problems.
- Act early on overdue debts: Prompt, professional recovery action can protect cash flow and relationships.
- Review exposure to high-risk accounts: Adjust credit terms where necessary to limit potential losses.
- Encourage open communication: Understanding your customers’ cashflow pressures can help you plan and negotiate effectively.
Our view
Our team continues to see the knock-on effects of high insolvency levels across the construction sector. Even well-managed firms are feeling the strain from late payments, extended credit terms, and reduced margins.
The message is clear: early visibility and action make the difference. Businesses that monitor customer credit, manage debt exposure, and take early steps to recover overdue payments are far more likely to stay resilient — even when trading conditions remain challenging.
At times like these, credit control and debt recovery aren’t just about chasing payments; they’re about protecting relationships and cash flow. Knowing who you’re trading with, keeping close tabs on changes to their financial health, and acting promptly when risk increases can help prevent problems before they become losses.
How can we help
If you’re concerned about late payments or want to strengthen your credit management processes, our specialist construction credit and debt recovery team can help. From real-time credit data to effective recovery strategies, we’re here to help you protect your business and keep projects moving.
