{"id":144931,"date":"2024-10-24T09:17:56","date_gmt":"2024-10-24T08:17:56","guid":{"rendered":"https:\/\/www.pbctoday.co.uk\/news\/?p=144931"},"modified":"2024-10-23T14:38:09","modified_gmt":"2024-10-23T13:38:09","slug":"sub-contractor-insolvencies-worst-hit-in-industry","status":"publish","type":"post","link":"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/sub-contractor-insolvencies-worst-hit-in-industry\/144931\/","title":{"rendered":"Sub-contractor insolvencies worst hit in industry"},"content":{"rendered":"

The construction industry remains the hardest hit for insolvencies, with sub-contractor insolvencies taking the most blows<\/h2>\n

The year to August 2024 saw 4,310 construction companies of all sizes fell into insolvency, and sub-contractor insolvencies making up 2,514 of cases, according to data from the Government’s Insolvency Service<\/a>.<\/p>\n

This number represents a rise of 1.1% rise in construction insolvencies from the previous 12-month period.<\/p>\n

17.4% of all insolvency cases are in construction<\/h3>\n

The number of insolvency cases in construction is nearly 500 more than the next sector, that being wholesale and retail trade; repair of motor vehicles and motorcycles, which accounted for 15% of all insolvency cases.<\/p>\n

Construction has consistently remained the industry with the highest number of insolvencies since Q3 2017. Since 2021, 11,000 firms have closed with roughly 100,000 workers losing their job.<\/p>\n

Last month, ISG fell into administration<\/a>, making 2,200 staff redundant and risking no payment to many smaller firms.<\/p>\n

Sub contractor insolvencies remain the worst hit<\/h3>\n

Of the 4,310 construction companies, sub-contractor insolvencies accounted for 2,514 (58%) of them.<\/p>\n

In August alone, sub-contractors made up 211 of the 329 construction firm insolvencies, and in November 2023, 421 construction companies closed, with 247 (nearly 59%).<\/p>\n

The issues that construction firms face include continued struggles recovering from the COVID-19 pandemic, leading to factors such as increased labour costs, material shortages, income gaps, and reduced demand to name a few.<\/p>\n

Another issue is a turbulent political landscape, most pressingly at the moment is the upcoming October budget due 30 October, and a current issue in the industry with late payments and practices considered unfair.<\/p>\n

Smaller firms are more cash reliant<\/h3>\n

Construction Products Association (CPA) economics director, Noble Francis, said: “<\/i>Taking out monthly volatility, so far this year the number of firms going out of business continued to broadly flatline but at its highest levels since the financial crisis.<\/p>\n

“The largest impacts of downturns in house building and rm&i, rises in labour, materials and financing costs plus project delays continued to be on specialist contractors.<\/p>\n

“More than half of the construction firms that went out of business in the year to August were specialist sub-contractors, which are most of the industry, as major house builder and Tier 1 contractor business models are based on sub-contracting cost, activity and risk out to specialist contractors.<\/p>\n

“Specialists are, however, smaller firms that are cash-flow reliant and more vulnerable to both sharp falls in demand and cost increases, skills shortages and project delays, as they are often on fixed-price contracts.”<\/p>\n

\n<\/div>","protected":false},"excerpt":{"rendered":"

The construction industry remains the hardest hit for insolvencies, with sub-contractor insolvencies taking the most blows.<\/p>\n","protected":false},"author":32,"featured_media":144933,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[304],"tags":[20347,908],"stakeholder_rel_tag":[],"contributor_rel_tag":[],"class_list":{"0":"post-144931","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-planning-construction-news","8":"tag-administration","9":"tag-economy"},"acf":[],"yoast_head":"\nSub-contractor insolvencies worst hit in industry<\/title>\n<meta name=\"description\" content=\"The construction industry remains the hardest hit for insolvencies, with sub-contractor 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