Construction and Hospitality Insolvency in 2025

The UK economy in 2025 has been testing businesses across almost every sector, but two industries stand out as bearing the heaviest weight: construction and hospitality. Both employ hundreds of thousands of people, support regional economies, and act as lifelines for local communities. Yet both are finding themselves among the hardest hit when it comes to company insolvencies this year. Simple Liquidation has been monitoring these developments closely. As insolvency practitioners with decades of experience, we know that behind every statistic lies a story of directors struggling to keep things going under unprecedented pressures. This blog explores why construction and hospitality insolvencies remain so high in 2025, what the drivers are, and most importantly, what company directors can do if they feel their own business may be heading down a similar path.


Insolvency data published this summer showed construction continues to be the most affected sector, accounting for around 17% of all company failures in the UK. That figure represents nearly 4,000 construction businesses over the past 12 months: small contractors, regional builders, and even some mid-sized firms that had previously weathered the storms of Brexit, the pandemic, and rising material costs.

The question many ask is: why construction?

The cost of materials remains volatile. Timber, steel, and cement prices have all seen sharp fluctuations due to global demand shifts and energy price shocks. While large developers may have the scale to absorb these rises or renegotiate contracts, small and medium-sized firms often operate on fixed-price agreements. Any unexpected cost spike erodes already tight margins and pushes directors into untenable positions.

The industry continues to face a skilled labour shortage, which has only worsened since the pandemic. With demand outstripping supply, wages have risen significantly. For companies locked into contracts, those higher wages often cannot be recovered from clients.


Construction and Hospitality Insolvency in 2025

Location: London, UK

Comments

Post a Comment

Popular posts from this blog

Role of Government in Shaping Insolvency Outcomes in the UK

Image
Insolvency is a critical aspect of any robust economic system, providing mechanisms for businesses to either restructure or close down while ensuring fair treatment for creditors and other stakeholders. In the United Kingdom, the government plays a pivotal role in shaping insolvency outcomes by designing legislation, providing oversight, and facilitating mechanisms to resolve financial distress. At Simple Liquidation, we understand the importance of government involvement in ensuring that insolvency processes remain transparent, fair, and effective. As one of the UK’s most appointed insolvency practices, we are committed to helping businesses navigate financial challenges in alignment with established regulations. Government’s Role in Insolvency Framework The UK government’s involvement in insolvency is multifaceted, encompassing regulatory, legislative, and policy-making responsibilities. Key areas of influence include: 1. Legislative Framework The foundation of insolvency proceeding...
Read more

How Does the Liquidation of 77-Year-Old Clarkebond Reflect the Changing Industry Landscape?

Image
The sudden liquidation of Clarkebond (UK) Ltd in December, just three months after its acquisition by Independent Design House Group (IDHG), has shocked many in the engineering sector. A firm with a proud 77-year legacy, its abrupt collapse raises important questions about the changing dynamics in the industry, particularly concerning mergers and acquisitions, management practices, and the impact of new ownership on established businesses. In this blog, we explore how the Clarkebond liquidation highlights broader trends in the engineering and consultancy industry and what it means for companies navigating an increasingly complex business environment. Clarkebond was once a leading engineering consultancy, trusted by clients for nearly eight decades. However, the acquisition by IDHG, a specialist in temporary works, marked a significant shift. IDHG’s leadership saw the acquisition as an opportunity to expand its footprint, increase its workforce, and diversify its services. They were opt...
Read more

Types of Bankruptcies in the United Kingdom

Image
Bankruptcy and insolvency can be daunting concepts, but understanding the different forms they take in the United Kingdom is essential for anyone facing financial challenges—whether as an individual or a business owner. UK insolvency law is designed to help manage unpayable debts and protect the interests of both debtors and creditors. While the term “bankruptcy” is often used colloquially to refer to any financial collapse, it specifically applies to individuals, while companies face liquidation, administration, or voluntary arrangements. This blog provides a comprehensive look at the main types of bankruptcies and insolvency procedures in the UK, including who they apply to, how they work, and what their consequences are. We’ll also highlight why expert guidance from professionals like Simple Liquidation is invaluable during these critical moments. Personal Bankruptcy Bankruptcy in the UK is a legal process available to individuals who are unable to repay their debts. It is typicall...
Read more