UK construction insolvencies rise

Nearly 10,000 UK construction and manufacturing companies became insolvent in the last two years, and 2012 could see the sectors faced with the same woes, according to consultancy PricewaterhouseCooper (PwC).

In 2010, 2,527 construction companies and 2,162 manufacturing companies went into administration. Last year, 2,688 further construction companies and 1,939 manufacturers went under.

Jonathan Hook, head of engineering and construction at PwC, said, "2011 was another tough year for the construction sector and there were 6% more insolvencies in the sector in 2011 than 2010. Over the last two years we have lost more than 5,000 construction companies and the trend shows no sign of abating."

London alone suffered 927 construction insolvencies since the start of 2010. Other badly affected areas for both sectors included the West Midlands, Yorkshire region and the north west of England.

Under the ongoing cloud of economic and unemployment uncertainty, PwC said 2012 could see both sectors faced with the same challenges.

"The cuts to the government's capital programme and uncertainty around the economy and financing generally means there is little chance that 2012 will see this trend reverse. London reported a 5% decline in the number of insolvencies in the sector last year, highlighting that it is increasingly tough elsewhere in the regions, where we saw a 9% increase," Mr Hook said.