{"id":835115,"date":"2025-03-19T08:11:54","date_gmt":"2025-03-19T13:11:54","guid":{"rendered":"https:\/\/newsycanuse.com\/index.php\/2025\/03\/19\/burden-of-expensive-debt-hits-construction-as-insolvencies-stay-high\/"},"modified":"2025-03-19T08:11:54","modified_gmt":"2025-03-19T13:11:54","slug":"burden-of-expensive-debt-hits-construction-as-insolvencies-stay-high","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2025\/03\/19\/burden-of-expensive-debt-hits-construction-as-insolvencies-stay-high\/","title":{"rendered":"\u2018Burden of expensive debt\u2019 hits construction as insolvencies stay high"},"content":{"rendered":"
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\"cranes_construction_generic.jpg\"<\/p>\n

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More than 300 firms in the construction industry became insolvent in January as firms struggled to cope amid the \u201cburden of expensive debt\u201d.<\/span><\/p>\n

According to data released this morning by the Insolvency Service, 305 construction companies in England and Wales went under during the month \u2013 the second most of any industry and 15.7 per cent of all businesses that collapsed.<\/span><\/p>\n

Only the wholesale and retail motor trade recorded more insolvencies, at 312.<\/span><\/p>\n

The construction figures represent an increase on December, when the Insolvency Service recorded 292 failures.<\/span><\/p>\n

The sector accounted for the highest number of insolvencies for the year to January, with 4,031 in total (17 per cent). That was 400 more than the next most affected sector \u2013 the wholesale and retail trade of motor vehicles \u2013 which recorded 3,631 insolvencies.<\/span><\/p>\n

Kelly Boorman, national head of construction at consultancy RSM UK, said the high number of insolvencies was \u201cto be expected given the ongoing burden of expensive debt and fragile supply chain\u201d.<\/span><\/p>\n

She warned that, despite the \u201cstrong pipeline of work\u201d, the sector was not seeing its volume of work increase, due to delays in mobilisation, expensive-debt issues and economic uncertainty in the wake of the<\/span> government\u2019s Autumn Budget<\/span><\/a>.<\/span><\/p>\n

\u201cBusinesses are therefore preserving working capital and are yet to see the growth they anticipated in 2025,\u201d she added.<\/span><\/p>\n

Boorman also warned that the sector was braced for the looming increase to employer national insurance contributions from 6 April \u2013 announced by chancellor Rachel Reeves in the autumn \u2013 which will \u201csqueeze margins\u201d at firms throughout the sector.<\/span><\/p>\n

Construction industry executives have said they expect to take a hit as a result. For example, Glencar chief executive Eddie McGillycuddy told <\/span>Construction News <\/span><\/i>that the<\/span> increase would \u201csting a bit\u201d, adding that the changes<\/span><\/a> were \u201cill-thought-out\u201d.<\/span><\/p>\n

Boorman did, however, welcome the government\u2019s announcement last week of its<\/span> upcoming Planning and Infrastructure Bill<\/span><\/a>, which she said would \u201cremove red tape, streamline planning and accelerate decision-making, reducing administrative delays\u201d.<\/span><\/p>\n

\u201cWhile this is a promising development, it will take some time to materialise and it\u2019s important the government considers the role of technology in accelerating delivery in the run-up to the Spring Statement,\u201d she added.<\/span><\/p>\n

The chancellor is expected to deliver the statement on 26 March.<\/span><\/p>\n<\/div>\n<\/div>\n

Read More<\/a>
\n Joshua Stein<\/p>\n","protected":false},"excerpt":{"rendered":"

More than 300 firms in the construction industry became insolvent in January as firms struggled to cope amid the \u201cburden of expensive debt\u201d. According to data released this morning by the Insolvency Service, 305 construction companies in England and Wales went under during the month \u2013 the second most of any industry and 15.7 per<\/p>\n","protected":false},"author":1,"featured_media":835116,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[98384,505],"tags":[],"class_list":{"0":"post-835115","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-burden","8":"category-expensive"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/835115","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=835115"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/835115\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/835116"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=835115"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=835115"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=835115"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}