What the November 2025 Insolvency Figures Mean for the Construction Industry

Published on 22^nd December 2025

The latest company insolvency figures for England and Wales provide a welcome (though cautious) signal for the construction sector.

In November 2025, there were 1,866 registered company insolvencies, down 8% on October and 7% lower than November 2024. While insolvency numbers across 2025 remain slightly higher than last year, they are still significantly below 2023, which saw the highest annual insolvency levels in 30 years.

For construction businesses operating in an environment defined by tight margins, extended payment terms, and ongoing cost pressures, these figures matter — not just as statistics, but as indicators of risk across the supply chain.

A Closer Look at the Numbers

The majority of insolvencies in November 2025 were creditors’ voluntary liquidations (CVLs), accounting for 1,461 cases. These are typically used when directors conclude that a business can no longer meet its obligations, a familiar scenario in construction where cash flow can deteriorate quickly following delayed payments, cost overruns, or the failure of a key client.

There were also:

• 250 compulsory liquidations, down 21% on the previous month
  
• 136 administrations, a slight increase month-on-month
  
• 18 company voluntary arrangements (CVAs)
  
• One receivership appointment
  

The reduction in compulsory liquidations is particularly notable. These often follow sustained creditor pressure or HMRC action, so the decline may indicate that fewer businesses are being pushed to the crisis point, or that more directors are acting earlier.

At the same time, the increase in administrations and CVAs suggests a growing willingness to explore restructuring and rescue options, rather than allowing businesses to fail outright.

Construction Still Most Affected Sector – November 2025

In November 2025, construction remained the sector most impacted by company insolvencies:

• Construction: ~15–18% of all insolvencies – the highest of any sector
  
• Wholesale & retail trade: ~16%
  
• Accommodation & food services: ~14%
  
• Administrative & support services: ~10%
  
• Manufacturing: ~8%
  

Even as total insolvencies fell compared with October, construction businesses continue to face cashflow pressures, contract challenges, and rising costs, keeping sector risk elevated.

Our takeaway: Creditors and suppliers should keep a close eye on cash flow and payment behaviour, and businesses should consider early action to protect liquidity and manage exposure.

What This Means for Construction Businesses

Construction remains one of the sectors most exposed to insolvency risk, not just at a company level but across entire project chains. When a contractor, subcontractor, or key supplier fails, the impact can be immediate and far-reaching.

Key structural challenges remain:

• Long payment cycles and retentions, which restrict working capital
  
• Price volatility in materials makes fixed-price contracts riskier
  
• Dependency on a small number of contracts or clients
  
• Knock-on exposure when another party in the chain collapses
  

Although the 12-month rolling insolvency rate has dipped slightly to 52.9 per 10,000 companies, this does not remove the need for caution. Insolvency rates have risen from the unusually low levels seen during 2020–21 and, while still well below the peaks of the 2008–09 recession, the risk landscape remains challenging.

It is also important to note that the apparent moderation in insolvency rates is partly due to the number of registered companies more than doubling over the past decade. In practical terms, failures remain a regular feature of the commercial environment.

Early Indicators From A Creditor Perspective

For construction businesses, insolvency is rarely sudden. Financial distress typically develops over several months, leaving early warning signals that creditors can identify through credit monitoring, payment behaviour, and commercial intelligence.

Creditors should be alert to:

• Deteriorating payment performance, including slower settlement of invoices, partial payments, or increased reliance on extended terms
• Changes in supplier behaviour, such as requests for revised terms, staged payments, or early-settlement concessions
• HMRC-related risk indicators, including signs of PAYE, VAT, or CIS arrears, or repeated Time to Pay arrangements
  
• Evidence of contract underperformance, where rising labour or material costs are eroding margins and increasing cash dependency
• Escalating creditor activity, including frequent chaser correspondence, statutory demands, or the emergence of winding-up threats
• Overtrading indicators, where turnover increases, but liquidity weakens, suggesting contracts are being used to fund short-term cash gaps
• Withdrawal or tightening of third-party support, such as reduced bank facilities, bonding capacity, or insurance cover
• Reduced financial transparency, including delayed filings, inconsistent management information, or limited visibility over work in progress and profitability
  

Businesses exhibiting multiple indicators are typically operating under sustained cashflow pressure.

Our Take

The November figures point to stabilisation rather than recovery.

The fall in liquidations is encouraging, but the dominance of CVLs shows that many businesses are still reaching the point where directors feel they have no viable alternative. For construction, this reinforces a long-standing truth: cash flow, not profit, determines survival.

We are also seeing a gradual shift toward earlier intervention, with more companies exploring administration or CVAs before creditor pressure becomes overwhelming. That is a positive development — but only for those who act in time.

Construction businesses that stay close to their numbers, actively manage supply-chain risk, and seek advice early are best placed to navigate the months ahead.

Strengthening Your Foundations

If you operate in the construction sector — whether as a contractor, subcontractor, developer, or supplier — now is the time to review your financial position and risk exposure.

• Are you confident in your cashflow forecasts?
  
• Do you understand your exposure to supplier or client insolvency?
  
• Do you have a plan if a major contract underperforms or payments are delayed?
  

Early advice can make a critical difference. Speaking to an experienced advisor before problems escalate can help protect your business, your projects, and your people.

📩 Contact us today to see how our insight and support can help you manage credit risk, minimise debt, and protect cashflow.