The number of builders’ merchants falling into insolvency fell sharply during November 2024, according to new figures, but the wider construction sector continued to suffer from an array of economic challenges.
According to new figures from construction industry marketing data specialist Insight Data, just six UK builders’ merchants fell into insolvency during November 2024, down by 72 per cent from 21 in October.
Despite the positive news for the builders’ merchants sub-sector, Insight Data’s November 2024 report demonstrated the scale of the difficulties still facing the construction industry more broadly, with builders’ merchants being the only group to see a reduction in insolvencies last month.
According to Insight Data, seven main contractors with turnover of more than £5 million collapsed into insolvency during November, a 133 per cent increase on the previous month. Meanwhile, 115 smaller builders fell into insolvency, up by more than 35 per cent from 85 in October 2024.
Insight Data Commercial Director Alex Tremlett said that the "sharp decline in builders’ merchant insolvencies is incredibly encouraging and refreshing to see.” However, he added that, “unfortunately, the same can’t be said about the wider construction industry as we continue to see big rises in the number of main contractors and small builders closing their doors.”
Tremlett also pointed to regional disparities in the data, commenting: “When reviewing these insights, it’s also important to look at how the data differs based on location. With the North West accounting for a third of November builders’ merchant insolvencies, it’s clear that some areas across the country are facing greater pressures than others.”
The UK construction sector’s struggles over recent years have been extremely well documented, with the industry regularly recording among the highest number of insolvencies of any sector across the country.
Despite signs of greater economic stability during 2024 and a slight improvement in sentiment among construction businesses following the general election in July, insolvencies have remained. Businesses have continued to struggle with issues such as high levels of debt, soaring costs and the collapse of other companies within their supply chains.
Research conducted earlier this year found that businesses involved in the development of building projects were the most likely to enter insolvency, while another survey found that more than half of construction companies polled said that they were involved in projects that were impacted by insolvency during the second quarter of 2024.
Against this backdrop, the new Insight Data report at least shows some reasons for optimism, whilst also delivering a further reminder of the scale of the challenges that the construction sector faces.
There are concerns that insolvencies could increase further in the wake of the government's recent budget
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