Nearly 13,000 construction companies out of business in last 3 years

Published by Max Salsbury for 24dash.com in Housing and also in Central Government

The latest construction insolvency figures out today show that 911 construction companies went out of business in the last registered quarterly figures. Today’s figures mean that nearly 13,000 construction companies have gone out of business in the last three years.

The current recession has seen a large number of construction company insolvencies.  In 2009 the industry experienced its highest level losing 4,503 companies, whilst 2010 saw this figure drop to 3,589 only to rise again last year to 3,707. The total amount of  construction companies that have become insolvent in the last three years stands at 12,710.

The first quarter of 2012 saw a slight decrease of 2.5% in the number of construction insolvencies compared to the last quarter of 2011. The figures are set against a backdrop of negative growth in the construction industry, with more than 900 construction and property companies going out of business most quarters.

Figures from the recessions 1980s and the 1990s suggest that insolvencies continue to rise after a recession officially ends, culminating in an eventual high some time afterwards.

Alan Harris, director at construction risk management firm CR Management said: “We must take steps in each of our businesses to ensure that we don’t follow in this pattern and are not one of the casualties, as the recession takes its toll on weakened businesses.

“The good news is that there have been remarkably few disputes in this recession.  Good business practices, risk averse contracts and bringing in outside experts for additional support as soon as you need them, have been cornerstones for the companies that continue not only to survive but thrive in construction.”