{"id":158488,"date":"2026-01-20T12:56:32","date_gmt":"2026-01-20T12:56:32","guid":{"rendered":"https:\/\/www.pbctoday.co.uk\/news\/?p=158488"},"modified":"2026-01-20T12:56:32","modified_gmt":"2026-01-20T12:56:32","slug":"more-than-40-construction-businesses-have-failed-last-half-decade","status":"publish","type":"post","link":"https:\/\/www.pbctoday.co.uk\/news\/hr-skills-news\/more-than-40-construction-businesses-have-failed-last-half-decade\/158488\/","title":{"rendered":"More than 40% of construction businesses have failed in last half decade"},"content":{"rendered":"

Analysis from Witan Solicitors, using data from Companies House, has highlighted the continued difficulties facing construction businesses<\/h2>\n

The data shows that, from January 2021 to December 2025, 41.6% of construction businesses have failed.<\/p>\n

These businesses have either gone into administration, liquidation, or dissolved.<\/a><\/p>\n

Business mortality rates affect different sectors<\/h3>\n

Of the 257,087 businesses that opened in this period, this means 107,086 closed sometime afterwards. But not all sectors are affected equally.<\/p>\n

Companies involved in constructing bridges or tunnels, for example, saw a whopping 70.5% closure rate, the highest by far. This is followed by road and motorway companies at 59.5%, then railway and underground railway at 51.9%.<\/p>\n

Commercial building construction fares somewhat better at 46.4% and domestic building construction is similar at 43.4%<\/p>\n

The companies least likely to close are those involved in construction holding, at 25.7%, whole rental\/leasing companies involved in construction equipment and civil engineering machinery are at a relatively safe 32.6%.<\/p>\n

\u201cVery few signs that things will ease in the short term\u201d<\/h3>\n

Qarrar Somji, solicitor-advocate and director at Witan Solicitors, said: \u201cThe construction industry is under sustained and growing pressure, and there are very few signs that things will ease in the short term. In the past few years, we\u2019ve even seen the collapse of well-known contractors such as ISG. So understandably, things may feel pretty bleak for firms that have just entered the market.<\/p>\n

\u201cBut these challenges aren\u2019t confined to one corner of the industry. Whether you\u2019re looking at major infrastructure projects like roads, railways, bridges and tunnels, or at commercial and residential buildings, the same underlying problems keep resurfacing. Rising costs, stretched supply chains, skills shortages and increasingly complex regulation are crippling the industry.<\/p>\n

\u201cCash flow remains one of the most critical pressure points, especially for smaller firms. In many cases, contractors are waiting 90 days or more to be paid. During that time, payments can be reduced or delayed through \u2018pay-less\u2019 notices, and disputes can drag on for months. This means that firms are effectively financing projects themselves while labour, materials and overheads continue to increase.<\/p>\n

\u201cThis payment model is fundamentally flawed. While stronger regulation is clearly needed to protect the health of the supply chain in the long term, businesses can\u2019t afford to wait for systemic reform. In the short term, firms need to be far more assertive about contractual payment terms and much quicker to put protections in place when early warning signs of financial distress appear.<\/p>\n

\u201cThe Autumn Budget<\/a> adds another layer of strain. From April 2026, the legal minimum wage for workers aged 21 and over will rise by 4%, from \u00a312.21 to \u00a312.71 per hour. Over the coming months, many firms will be forced to make difficult decisions about recruitment, pay, and whether projects remain commercially viable at all. Repricing work is becoming unavoidable, but that comes with its own risks in a highly competitive market. We\u2019re likely to see more companies pushed towards restructuring or, in some cases, outright collapse.\u201d<\/p>\n

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

New data analysis from Witan Solicitors has revealed that construction business failure rates are still high.<\/p>\n","protected":false},"author":32,"featured_media":158489,"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":[285],"tags":[20347,908],"stakeholder_rel_tag":[],"contributor_rel_tag":[],"class_list":{"0":"post-158488","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-hr-skills-news","8":"tag-administration","9":"tag-economy"},"acf":[],"yoast_head":"\nMore than 40% of construction businesses have failed in last half decade<\/title>\n<meta name=\"description\" content=\"New data analysis from Witan Solicitors has revealed that construction business failure rates are 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