Insolvencies in the construction industry have dropped to their lowest level for five years, according to data from the Insolvency Service.
A total of 603 construction firms were declared insolvent in Q3 2015, down 2 per cent from the 614 reported a quarter earlier.
This is the lowest level reported since Q1 2010 when current records began and the second consecutive quarter of decline, despite the fact that 85 per cent of respondents to the Construction News Barometer saw a supplier go bust during 2015.
In the first three quarters of 2015, 1,895 construction firms were declared insolvent. If the current trend continues when Q4’s figures are finalised, 2015 will also mark the lowest annual level of company insolvencies since 2010.
In 2011, 4,047 firms were declared insolvent, while in 2012 this figure stood at 3,726.
Within the latest quarterly total, the number of building construction firms declared insolvent in Q3 2015 fell below 200 for only the third quarter on record, falling to 184, down from 187 a quarter earlier.
The number of specialised construction firms declared insolvent also fell to its lowest level on record, dipping to 381 compared with 382 a quarter earlier. This is only the third time that insolvencies in this sub-sector have fallen below 400 since 2010 – figures below 400 were only previously recorded in Q4 2014 and Q2 2015.
Total construction insolvencies Q1 10-Q3 15_The Insolvency Service
Source: The Insolvency Service
Administrations in construction fell to 38 in Q3 2015, down from 39 a quarter earlier. This is the third-lowest level of administrations recorded in the industry since 2010.
However, 2016 has already seen two high-profile collapses, with Longcross subsidiary LX Engineeing (South) entering administration earlier in January.
PC Harrington subsidiary Slipform International also entered administration earlier this year, with the firm still owed £8m by its troubled parent firm.