Close Menu
UK Liquidators

Insolvency Related News

Latest News from UK Liquidators

Low-Cost Liquidation
100% Confidential
Stop HMRC & Creditor Pressure
Partner-led Service

Rising Costs Pushing Construction Firms towards Insolvency

By Jon Munnery
18 January 2022

Rising costs and issues with recruitment are contributing to an increase in the number of construction companies entering insolvency across the UK.

Several hundred businesses from within the construction sector were collapsing financially every month in the second half of 2021 as insolvency rates increased significantly, according to official figures.

A major part of the problem for firms in the sector is understood to be the rising costs of essential building materials and a relative lack of access to employees from the EU since Brexit.

Speaking to the Financial Times about some of the relevant issues, Noble Francis from the Construction Products Association said that small scale specialist subcontractors have suffered “the full force of supply problems”.

He added that rising costs have had the effect of delaying certain projects, which has then badly impacted the revenue streams of companies already struggling to keep their cashflows moving and their outgoings covered.

The issues that have clearly resulted in an uptick in insolvency cases and entries into liquidation recently are having the impacts they are despite unusually high levels of demand for building-related services.

Prices of materials including timber, steel and cement have all increased in recent quarters, while a lack of access to skilled workers from the EU has pushed up wages among workers, according to the FT.

In general, larger companies have been able to overcome the challenges they’ve been facing in terms of cost increases but for many small and medium-sized firms the extra costs and project delays have been enough to put them out of business.

“Building contractors are being hit from all sides,” said Rebecca Dacre, a construction business expert from the accountancy and consultancy firm Mazars.

“Supply chain chaos, spiralling inflation and a vanishing pool of workers are combining to ramp up the financial pressure on them. For some the burden is too much and this is pushing them under.”

Another problem highlighted by Ms Dacre is that some businesses have effectively been ‘overtrading’, meaning they’ve been taking on too much work without having the cashflow they need to balance their books consistently given current conditions.

Jonathan Munnery
Insolvency & Restructuring Expert
Is Liquidation the best option for you?

By completing the test, you will receive:

Your Liabilities & Assets
Types of Liquidation Available
Your Companies Health Risk
Alternatives to Consider
Related Articles
Voluntary Liquidation Cases Up 9% On Last Year
The number of voluntary liquidation cases in England and Wales were up by 9 per cent in March as compared to the same month of last year.
Read more
Fashion Retailer Dress Me Online Entered into Liquidation
A fashion retail brand known as Dress Me Online has been entered into liquidation after struggling to cope with an array of financial pressures in recent months.
Read more
Soaring Cost of Steel Helps Push Engineering Firm into Liquidation
Steep increases to the cost of steel in recent months have helped force a Gloucestershire-based engineering firm into liquidation.
Read more
Ready to Liquidate?
Express Liquidation Service
Ready to start liquidating today? Complete the form and a member of our team will be in touch.
Please note: By completing this form you are not liquidating your company
Contact the UK Liquidators Team

If you are considering liquidation for your company, taking expert advice at an early stage is crucial. At UK Liquidators, our team of licensed insolvency practitioners are committed to providing limited company directors with the help and advice they need to make an informed decision.

  • Free initial consultation
  • Strictly confidential
  • Fully licensed insolvency practitioners
  • Local office support
  • Named case handler throughout
Logo Tma
Logo Business Recovery
Logo Cse
Logo Iip

Looking for immediate support?

Complete the below to get in touch

100% Free & Confidential Advice

This site uses cookies to monitor site performance and provide a more responsive and personalised experience. You must agree to our use of certain cookies. For more information on how we use and manage cookies please read our PRIVACY POLICY