Insolvencies Fall: May 2026 Update

Published on 19^th June 2026

Construction remains the most exposed sector despite a 10% month-on-month drop in overall business failures.

Overview

Registered company insolvencies in England and Wales fell sharply in May 2026. This drop offers a breather after the rising numbers we saw during March and April.

The Insolvency Service recorded 1,868 registered company insolvencies in England and Wales during May. This figure represents a 10% decrease compared to April 2026 (2,087). Furthermore, it sits 16% lower than the same month last year (2,231 in May 2025).

This 10% drop brings monthly business failures back down to the levels we saw between November 2025 and February 2026. For construction firms, this dip is welcome news. However, the long-term data shows that we cannot let our guard down. The trading environment is still demanding, meaning keeping a close eye on your supply chain is as important as ever.

(Note: You can view the full dataset on the official Insolvency Service page).

Headline figures at a glance

• Total Insolvencies: The department recorded 1,868 company insolvencies across England and Wales in May 2026.
• Month-on-Month Change: Figures dropped by 10% compared to April 2026 (2,087).
• Year-on-Year Change: Figures dropped by 16% compared to May 2025 (2,231).
• Top Impacted Sector: Construction remains the most vulnerable industry. It accounts for 3,803 cases, representing 17% of all business failures over the last 12 months.

Construction: ongoing pressure beneath the headlines

While overall business failures fell, the underlying pressures facing the construction sector haven’t gone away. Construction consistently tops the list for business failures. The sector saw 3,803 insolvencies in the 12 months leading up to May 2026.

Firms working across complex supply chains continue to battle severe headwinds:

• Sticky material costs and high everyday overheads.
• High interest rates that make project financing much harder to secure.
• Ongoing payment delays from clients who are managing their own cash flow issues.

Construction relies on a heavily interconnected network of developers, main contractors, and subcontractors. For this reason, cash flow remains the biggest risk. Financial stress in one part of a project can quickly domino. As a result, it causes sudden disruption and bad debt exposure for everyone else down the line.

What’s driving the May decrease?

A closer look at the data shows that May’s numbers represent a cooling-off period across almost all insolvency types:

• Correction from the Real Estate Spike: In April, a one-off cluster of more than 70 connected real estate failures drove up administration numbers. In May, administrations fell by 24% because that specific pressure cleared.
• Drop in Core Liquidations: Creditors’ Voluntary Liquidations (CVLs) dropped by 5% compared to April. Compulsory liquidations also fell sharply by 26%. Both types dropped below their 2025 monthly averages.
• A Normal Monthly Shift: A 10% drop between months matches typical market movements. Over the last three years, the average absolute change between consecutive months has been around 9%.

A longer-term view

Over the last 12 months, the rolling insolvency rate sat at 50.9 per 10,000 companies. This means roughly one in 196 active companies entered insolvency. This figure is a slight improvement from the 53.0 per 10,000 companies we saw in the previous 12 months.

Insolvency rates are still well below the historic peaks of 113.1 per 10,000 companies seen during the 2008–09 recession. This is largely because the total number of registered companies in the UK has more than doubled since then. However, the last four years have still seen the highest volumes of CVLs since records began in 1960. Business distress remains plateaued at a historically high level.

What this means for construction businesses

The May data shows a step in the right direction, but sector risk remains static. In an environment where profit margins are thin, a proactive approach to credit control is your best defense:

• Tighten your customer checks: Do not rely on past relationships. Check real-time credit positions before starting new phases of work, not just at the start of a contract.
• Watch how fast you’re getting paid: A sudden slowdown in how quickly a client settles your invoices is almost always the very first warning sign of internal cash flow issues.
• Act early on overdue invoices: Be decisive with your credit control. This prevents a client’s payment delay from putting your own cash position at risk.
• Spread your risk: Review your projects and clients. Ensure your business isn’t overly dependent on one major contract for its core revenue.
• Keep communication open: Talk to your clients regularly. If you do this, you can spot and sort out potential payment roadblocks early.

Our view

May’s 10% drop in insolvencies is a welcome relief for the economy, but it does not mean the pressure is entirely off. From what we see on the ground day-to-day, construction firms are still finding the trading environment highly demanding.

Firms are managing to protect their margins if they maintain strong visibility over their cash flow. Robust credit management and proactive debt recovery aren’t just administrative tasks right now. They are essential tools to keep your cash flowing and your projects moving forward safely.

How can we help

Are you starting to notice delays in customer payments? Do you want to check your current credit risk exposure? Our specialist construction credit and debt recovery team is here to support you.

We use live credit insights and practical, straightforward recovery strategies. As a result, we help you stay in control of your ledger, protect your business against third-party failures, and make commercial decisions with absolute confidence.

• Act early on overdue invoices: Be decisive with your credit control. This prevents a client’s payment delay from putting your own cash position at risk.
• Spread your risk: Review your projects and clients. Ensure your business isn’t overly dependent on one major contract for its core revenue.
• Keep communication open: Talk to your clients regularly. If you do this, you can spot and sort out potential payment roadblocks early.

Our view

May’s 10% drop in insolvencies is a welcome relief for the economy, but it does not mean the pressure is entirely off. From what we see on the ground day-to-day, construction firms are still finding the trading environment highly demanding.

Firms are managing to protect their margins if they maintain strong visibility over their cash flow. Robust credit management and proactive debt recovery aren’t just administrative tasks right now. They are essential tools to keep your cash flowing and your projects moving forward safely.

How can we help

Are you starting to notice delays in customer payments? Do you want to check your current credit risk exposure? Our specialist construction credit and debt recovery team is here to support you.

We use live credit insights and practical, straightforward recovery strategies. As a result, we help you stay in control of your ledger, protect your business against third-party failures, and make commercial decisions with absolute confidence.