29 Jan UK Construction Industry Braces for Challenging Times as Number of Bankruptcies Soars
Turmoil facing the UK construction industry looks set to endure with the sector witnessing the highest incidence of bankruptcies for the past three years among all sectors across the private sector. According to auditing firm, Mazars, 4,370 construction companies have gone bust in the past year alone, compared to 4,086 in 2021/22 and 2,481 in 2020/21. Fix Radio – the UK’s only dedicated radio station for the trades, discusses the factors attributing to these challenging times for the sector.
The figures above portray a 7% increase in insolvencies from 2021/22 and 76% in 2020/21 and can primarily be attributed to high material and labour costs. Additionally, the surge in mortgage rates, which have reached a 15-year high, coupled with the increasing costs of borrowing, has resulted in a decline in consumer confidence, and has also affected the profit margins of ongoing and upcoming development projects.
In the past year, bankruptcies within the construction sector were predominantly attributed to specialized activities such as demolition, electrical, and plumbing, comprising 58% of the total. With these tough times predicted to persist through 2024/25, it is normal for companies to enter insolvency – however heavy emphasis has been placed on the importance of planning to combat this trend.
Clive Holland, broadcaster on Fix Radio, would be available to speak on the following aspects that continue to halt growth in the construction industry:
The shortage of skilled workers in Britain
The abolishment of the age for apprenticeships
Liberalising planning permission
Westminster indifference to the construction industry
How to encourage and support more small and medium sized (SME) building firms into the market
