Company insolvencies in England and Wales reached their highest level since the COVID-19 pandemic in July 2024, with 2,191 registered insolvencies—16% higher than in July 2023. This includes 320 compulsory liquidations, the highest since before the pandemic. Despite a 7% drop from June 2024, insolvency rates remain significantly elevated compared to pre-pandemic levels. However, they are still below the peak seen during the 2008-09 recession, partly due to the doubling of companies on the effective register. 

This rise in insolvencies, especially with a significant increase in compulsory liquidations, signals potential challenges for the UK’s construction sector. Construction firms, often heavily reliant on cash flow and vulnerable to economic fluctuations, may face heightened financial pressures. The sector has already been experiencing more business failures, project delays, and increased costs as struggling companies go under. Additionally, the insolvency trend has also discouraged new investment, tightened credit availability, and strained supply chains, making it difficult to sustain operations in the sector.

Insolvency patterns in construction align with those of the previous year, driven by soaring inflation, high materials costs, reverse charge VAT, late payments, and a downturn in activity. Moreover, the government initiated cancellation of highway projects and unfunded initiatives has had a significant impact on the construction industry, as well as road users and local communities.Along with added potential delays in infrastructure development, it has also led to reduced employment generation. The industry must now adapt to a shifting landscape with fewer public projects and increased financial scrutiny. 

If companies are not quick to adapt, such changes will lead to fewer contracts, increasing financial strain on construction firms already grappling with debt and reduced cash flow. Smaller companies, especially those reliant on public projects, may face heightened insolvency risks. This environment could create opportunities for investors to acquire distressed assets at lower costs, but it may also lead to job losses and slow economic recovery in the sector.

Construction News | Trent Civils Files for Administration

Trent Civils UK, a contractor specialising in civil engineering, groundworks, and concrete tank construction, is set to enter administration after filing a notice of intention at the UK insolvency court. Founded in 2017 by Richard Hattee, the company has worked on projects across the North of England and Scotland, including Cedars Business Park and Notre Dame College. 

Despite reporting net assets of £1.2 million in 2023, the company is now facing insolvency. Its registered address is in Scunthorpe, with operations also linked to Warrington. Insolvency practitioners Richard Pinder and Sean Williams of Leonard Curtis are handling the case.

Construction News | Fourbay Structures and Hodgkinson Builders File Administration Notices

On August 15, Fourbay Structures, a Norwich-based steelwork contractor founded in 1993, filed a notice of intention to appoint an administrator. This move followed Hodgkinson Builders Limited’s similar filing on August 14. Hodgkinson Builders Limited, the social housing division of Derby-based contractor Hodgkinson, is now seeking a buyer for its business.

Fourbay Structures specializes in the design, manufacture, and erection of steel frame buildings, handling projects ranging from 2 tonnes to over 600 tonnes. The company, which employed around 19 staff in 2023, has been involved in notable projects such as the eight-storey Tower Bridge Court in London, Bedford Police Station, several schools, a building for the University of Essex, and a waste facility in Hounslow. Fourbay Structures did not respond to requests for comment.

Hodgkinson Builders Limited, established in 2011, employed an average of 28 people during the 2022-23 financial year. The company is currently working on several social housing projects. Rising construction inflation, increased living costs, and financial pressures have led to the decision to close the social housing division. The company is negotiating with interested parties who are keen to acquire the social housing business. The Hodgkinson contracting brickwork division remains operational and unaffected by the closure of the social housing division.

Construction News | Bowie Construction in £2M debt

Groundworks specialist Bowie Construction collapsed 2 months ago, owing more than £2.2 million to its supply chain. Based in Cambridgeshire, the company had an annual turnover of £14.5 million. However, administrators from Quantuma Advisory have determined that the firm will be unable to pay most of its creditors, with only around £400,000 expected to be distributed to cover all debts.

At the time of its collapse, Bowie Construction was engaged in at least three projects in West Norfolk, including a £12 million subcontract for Morgan Sindall’s development arm, Lovell, on a 226-home project at Florence Fields, which experienced significant delays following the company’s downfall.

Bowie Construction’s financial troubles stemmed from severe cash flow issues related to a major project that failed to pay as expected. Beyond the supply chain debts, the company owed £395,000 to former employees, £190,000 to directors, and £344,000 to banks, bringing the total debt to £4.4 million. This sum also includes obligations to HMRC and the international product sourcing company Interco.

So far, administrators have managed to raise £648,417 for creditors through the sale of land, property, and plant machinery. However, it remains unclear if unsecured creditors—mainly subcontractors, building suppliers, and other construction firms—will receive any payments.

Founded in 2007 and based in Linton, Bowie Construction specialised in road and sewer construction, paving, fencing, and groundworks, operating as both a subcontractor and principal contractor. Despite generating £11.6 million in turnover for the year ending December 31, 2021, the company reported a loss of £624,000.