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Comment: Construction industry insolvencies decrease in 201214th May 2012


The latest construction insolvency figures show that 911 construction companies went out of business in the last registered quarterly figures, said Alan Harris, director at construction risk management firm, CR Management.  The figures mean that 12,710 construction and property companies have gone out of business in the last three years.

During this current recession the construction industry has seen a huge number of 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.

In the first quarter of 2012 there has been a slight decrease of 2.5% in the number of construction insolvencies compared to the last quarter of 2011. It has been a positive, if slight, downward trend with the numbers decreasing slightly over the last two quarters, but still the figures look pretty catastrophic, especially 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.

Harris 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."


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