There were more insolvencies in construction than in any other sector in the first six months of 2011, according to credit insurer, Euler Hermes.
There were 1,332 insolvencies across the sector in the first half of the year.
Paul Anderson, Euler Hermes risk manager said: “The problems in the construction sector are ongoing. Public sector spending cuts, the reduced volumes of contracts for tender and ever more competitive pricing are all having an impact, as is the sluggish demand for housing.”
Some 34% of these insolvencies come from Greater London and the South East - greater than the North East and North West combined at 23%. Greater London and the South East also account for 50% of Property insolvencies
However, Anderson says that this is because there is a greater number of firms in the south.
“It is the insolvency rates that are of particular note,” he said. “These show that the North East, Yorkshire & Humberside and Northern Ireland remain rooted to the top of the insolvencies table - though the rates of failure in H1.
“This is reflected in the number of claims and reports of overdue payments we are receiving from our clients,” he said.
“Some companies in the sector are chasing work at minimal margins - sometimes at considerable discount to cost. This increased competition and pricing pressure has come at a time when input prices for products such as precast concrete and fabricated steelwork have continued to grow.”