Number of administrations hits 150 in first half of 2025

The number of construction sector administrations in the first six months of the year has hit 150 – higher than the same period last year.

The latest monthly data from Creditsafe shows that 28 firms entered into administration in June – the same number as in May, but still more than April’s total of 21.

The June figure is 10 per cent lower than June 2024, when 31 administrations were recorded.

But the half-year total of 150 firms in 2025 is slightly higher than the first six months of 2024 (147).

One of the biggest casualties in June was Telford-based Elements (Europe) Ltd.

Its latest accounts for the year to 31 December 2023 showed it had a £42.2m turnover.

The modular construction firm, which was founded in 2005, specialised in offsite volumetric design and manufacturing of room modules and bathroom pods for use in residential developments, student accommodation and hotels.

In 2021 it expanded its horizons and took on two construction projects as the main contractor – the East Road Project in Hackney, London, and the Camp Hill Project in Birmingham.

However, administrators at Interpath said that both contracts incurred losses, causing a significant cashflow problem. While the directors of Elements Europe considered options for a sale, investment or refinancing, solvency issues meant the company had to be put into administration to protect the interests of creditors.

While 141 out of Elements Europe’s 217-strong workforce were made redundant immediately, the remaining 76 have been kept on to assist the administrators.

Another administration saw cladding firm English Architectural Glazing go under owing more than £24m.

The company – which was part of the collapsed Clarison Group – went under a matter of months after being separated from the group.

According to a Companies House filing by administrators at Begbies Traynor, it owed just over £3.3m to unsecured creditors including members of its supply chain and only £20,000 of the total is estimated to be recouped for unsecured creditors.

A total of 46 ex-employees are owed a combined £812,350, according to Begbies Traynor.

The last published accounts for the Suffolk-registered commercial glazing specialist show it turned over £21.7m in the year to 31 December 2023, up from £15.2m in the prior year.

Company directors blamed inflation for a challenging year.

Civil engineering contractor Eversholt-based LF Solutions Ltd also entered administration.

Its latest accounts to 28 February 2024 showed it had a turnover of £20.3m and generated a pre-tax profit of £218,000 while employing 15 staff.

‘Putting leaders to the test’

Nick Holloway, managing director and construction sector lead at advisory firm Interpath, said trade volumes were not coming back quickly enough.

“The construction industry has struggled to get going in 2025 as persistent challenges in the housebuilding sector continue,” he told Construction News.

“Weak activity, driven by high interest rates and a slow planning system offset any bright spots in commercial development and support for the energy transition. Combined, these conditions are putting leaders to the test.

“While our own data shows some deceleration in the levels of distress, trade volumes are not coming back quickly and businesses are rebasing their costs to survive. Tough decisions will protect balance sheets and liquidity over the next 12 to 18 months, before a return to growth, dependent on and underpinned by government action, in the medium term.”

Frances Coulson, head of insolvency and restructuring at law firm Wedlake Bell, said the construction sector was still facing a number of challenges.

“While construction remains the highest sector for insolvencies, these have slightly reduced and there is some expectation of small growth,” she said.

“There remains some uncertainty around prices for goods and materials – which has been complicated further by geopolitical developments – and the industry continues to battle with the impact of labour and skills shortages, and the seismic changes introduced by the Building Safety Act 2022.”

She believes that investment promised in the Infrastructure Strategy is good news for the future. However, it will depend on how quickly it will flow through the supply chain.

“Government policy promises significant investment into certain sectors. However, it remains to be seen how quickly this will flow through the supply chain, and whether this will benefit certain geographical areas and sectors more than others,” she added.

“It is expected that the UK will keep to a reasonable growth path. However, despite recent policy announcements, it is unlikely to be a smooth or fast ride to high growth.”