Construction insolvencies up 10%

The number of construction firms going bankrupt in May was almost 10% up on the month last year, with more than 250 falling during the month.

According to the latest figures from Experian, 252 construction firms went bust in May, up 9.57% on the same month in 2010. The figure was, however, 12% down on the 289 firms that went bust in April.

In total 0.16% of all construction firms collapsed in the month, compared to 0.14% a year ago. Building materials firms also showed signs of the weak economy, with nine of them failing, equivalent to 0.24% of all companies, an increase of 29% on the previous year.

The figure was also up from the eight firms that collapsed in April. All of the construction figures were significantly above the average for the whole economy, in which just 0.09% of businesses went bust.

Overall Experian’s figures across all sectors showed that the largest companies were the most resilient, experiencing the biggest fall in company insolvencies. All regions of the country experienced a year on year increase in insolvencies, with the exception of the north west and the south west of England.

Max Firth, managing director of Business Information Services at Experian, said: “The increase in insolvencies was relatively small and at 0.09 per cent, the rate is actually an improvement on April 2011. However in all economic climates, we urge businesses to ensure they effectively manage risk around their portfolio.”