Almost 1,000 construction firms are going into insolvency every three months and experts believe this figure is set to rise before the year is out.
The latest government figures show 701 companies went into liquidation this quarter, while the figure for the number of firms being forced in compulsory liquidation is projected at 276, which would bring the number of construction companies going out of business to almost 1,000.
Construction now accounts for a quarter of all insolvencies across the UK.
Partner at risk managers CR Management Alan Harris, said: ““While the insolvency figures back up what we have experienced with the main and subcontractors we work with, I think the true picture is yet to emerge and we will see a significant rise in insolvencies before the year is out.
“At the moment many contractors and subcontractors are supporting their businesses with cash generated when the market was healthy, however these reserves will not last forever and with no short term recovery in construction I anticipate that we will see a rise in insolvencies before the end of the year and into 2011. Alongside it I also expect to see a rise in disputes as companies are forced to take more desperate measures to get cash and stay in business.”