Construction insolvencies shoot up 35%

The number of construction companies falling into insolvency since April has risen 35% on a year ago.

Analysis into corporate insolvencies by Pricewaterhouse Coopers (PwC) showed that there were 449 insolvent construction companies in the second quarter of 2008.

Overall, 3,277 businesses entered insolvency in April, May and June - an increase of 22% on the same quarter last year.

Commenting on the construction figures, Barry Gilbertson, a partner in the property team at PwC said: "It is clear that the consumer downturn is now starting to have a real effect on the construction industry, but the slowdown in the industry is not yet fully visible.

"A large number of the construction insolvencies are subcontractors to the housing industry whose pipelines of work have all but dried up during the showdown in residential property, as many projects are mothballed or stopped before they even begin."