A study published by Midlands Concrete Pump Hire has revealed that nearly half of new construction companies could not survive more than a few years
The study uses data from Companies House to analyse construction closures from January 2020 to December 2024.
The data found that in the last five years, 48.6% of new construction companies have gone into administration, liquidation, or are fully dissolved.
Commercial building companies were least likely to survive
The numbers represent 260,919 businesses that opened during the specified time period. Of these, 126,817 closed.
The study also delved into the survival rates for different areas of the construction sector, with companies that build commercial buildings having a closure rate of 93.99%, followed by companies in bridge and tunnel construction at 60.8%, railway and underground railway construction at 55.96%, road and motorway construction at 52.16%, and water project companies at 41.29%.
Construction holding companies were the most resilient with a 25.78% closure rate, closely followed by construction equipment renting and leasing companies at 32.59%, other construction installation companies at 34.62%, civil engineering firms at 34.99%, and utility projects for electricity and telecommunications at 35.72%.
2025 has already seen several construction closures
In January, we saw Kaybridge Construction close after being in business since 1972, and seeing a pre-tax loss of £1.5m in the year to August 31 2023. Sheen Lane also fell into administration with a pre-tax loss of £27m in 2023.
Connect Modular and Clarkebond also fell into liquidation, and Ashville Aggregates and Concrete has fallen into administration.
In February, J S Wright fell into administration after 135 years of business.
In September last year, ISG fell into administration, destroying over 2,000 jobs and rocking the construction world, as ISG was the sixth largest construction firm in the UK and had over £1.15bn worth of public sector contracts. Many contractors were affected as the group could not pay them, and some fell in the aftermath, such as the lightning contractor Seventynine. Many conversations were sparked on how to best stay safe or prevent further damage in the awake of the event.
A spokesperson at Midlands Concrete Pump Hire said: “Our research provides valuable insights for entrepreneurs considering entering the construction industry. Understanding the survival rates of different sectors helps businesses make informed decisions, anticipate challenges, and position themselves for long-term success in a competitive market.”
