A TOTAL of 3,515 construction firms have gone bust in the past year as the downturn takes its toll, according to new research.
The sector has been hit by the government spending squeeze, which has led to the shelving of several public works projects.
The Highways Agency – the largest customer to the construction sector – is due to cut its spending by 44 per cent during the next three years – from £1.6bn in the 12 months to March 2011 to £922m by 2014.
Insolvencies were 18.4 per cent down in the year to the end of June from the 4,305 reported two years ago. But accountant Wilkins Kennedy, which carried out the research, said that construction companies were still under intense pressure. It was one of the sectors hardest hit since the recession, registering a total of 11,862 business failures since the beginning of 2009.
Nick Parrett, partner in charge of property and construction at the company said: “Construction orders in the second quarter are at their lowest level since 1980.
“But the good news for the sector is that both office rents and house prices have been clawing their way back. We are also seeing a modest recovery of some public sector activity. we are beginning to see a number schools starting to commission.”