Construction recorded more insolvencies than any other part of the economy during the year to July, despite failures remaining below their recent peak.
A total of 343 construction businesses became insolvent in England and Wales during July 2026, according to the latest Insolvency Service figures.
This was 3.3% higher than the 332 cases recorded in July 2025 and an increase from the 309 construction insolvencies reported in June.
Across the 12 months to July, 3,841 construction companies entered insolvency. The industry accounted for 17% of all cases and continued to record the highest total of any sector.
SPECIALIST FIRMS REMAIN EXPOSED
Businesses undertaking specialised construction activities accounted for 186 failures during July – 54% of the sector total.
This was marginally lower than the 194 recorded during the same month last year, but smaller contractors and specialist subcontractors remain particularly exposed to rising costs, project delays and tight margins.
The official figures do not establish a connection between individual insolvencies and the conflict in the Middle East. However, RSM UK warns that higher energy prices and uncertainty could place further pressure on an energy-intensive industry.
James Hawksworth (main picture, inset), Restructuring Advisory Partner at RSM UK, says: “Today’s figures shine a light on the construction sector’s diminishing capacity for resilience against economic headwinds.
“As an energy-intensive industry, continued conflict and uncertainty in the Middle East is proving a significant blow for many construction businesses, delaying investment and driving prolonged cost pressures amid an uncertain economic outlook.”
VIABILITY REMAINS THE TEST
Hawksworth says the updated National Planning Policy Framework could provide greater clarity and support housing delivery, but planning reform will not overcome schemes that are no longer financially viable.
“The issue of project viability remains paramount,” he says.
“As increasing energy and material costs squeeze already tight margins, and long-term uncertainties over the wider economy subdue investment appetite, many construction businesses remain in urgent need of near-term relief and support to stay afloat across the coming months.”
Although construction continues to lead the insolvency table, separate analysis of the June figures found that failures during the first half of 2026 were lower than in the equivalent period of any year since 2022.
