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Construction insolvencies fall to lowest level on record in Q2 2015

Construction insolvencies fell to their lowest level on record in the second quarter of 2015, with 613 recorded in the three-month period.

Insolvencies were 9.6 per cent lower in Q2 than the previous quarter, when 678 firms were declared insolvent, according to data from the Insolvency Service.

The latest figure is nearly half the mid-recession peak of 1,112 insolvencies recorded in Q1 2010.

Q2 also represented an improvement on the previous quarter, when insolvencies rose for the first time since Q1 2014.

Year on year, industry insolvencies fell by 13.7 per cent in the second quarter.

Broken down by subsector, 187 building construction firms were declared insolvent in Q2, down from 210 in Q1. This was another record low, beating the previous low of 190 recorded in Q3 2014.

Similarly, 382 specialist construction businesses were declared insolvent in the second quarter, down from 426 in the first – again a record low.

Only civil engineering deviated from this trend: 44 civils firms were listed as insolvent in Q2 2015, up from 42 in Q1.

Q2’s reading is the highest recorded since the 54 civils insolvencies reported in Q1 2014.

Mirroring insolvencies, liquidations also declined in the second quarter of the year, falling to 161 from 183 in Q1 2015. However, this was still 22 per cent higher than the record low of 132 liqudations recorded in Q4 2013.

Administrations saw an even sharper decline in Q2, falling to 39 compared with 57 in Q1 2015.

Across the subsectors, 14 building construction firms went into administration in Q2, down from 22 in the previous quarter, while for specialist firms the figure was 18, down from 29 in Q1 2015.

Recent high-profile administrations in the industry include PC Harrington Contractors, which filed for administration after revealing a loss of £4.1m for the 2013/14 financial year.

Retail specialist Longcross Group also went into administration in June, with around 140 jobs axed as a result.

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