The construction sector remains under immense pressure, with 448 firms going under in February 2025, making up 19% of all insolvencies. Supply chain disruptions haven’t eased, material costs remain stubbornly high, and with inflation stuck at 3%, there’s little breathing room.
Chapter 1
Overview
February insolvency numbers are in and they paint a picture of both struggles and resilience. 2,364 businesses across the UK and Northern Ireland declared insolvency in February 2025 - a 28% rise from January but 10% lower than the same time last year. It’s a mixed signal: while the month-on-month surge suggests ongoing financial strain, the year-on-year dip hints that some businesses are finding ways to adapt.
The construction sector continues to top the table, accounting for 19% of all insolvencies. With 448 firms shutting their doors, the industry continues to battle material and labour costs, supply chain instability, and a sluggish housing market. Even the government’s pledge to build 1.5 million new homes is met with scepticism, as a shortage of workers and resources threatens its feasibility.
Key Takeaways from February 2025
- Total Insolvencies: 2,364 businesses ceased trading.
- Month-over-Month Change: A 28% increase from January, reflecting ongoing economic strain.
Year-on-Year Change: Insolvencies came in 10% lower than February 2024, hinting that some firms are adapting. - Sector Impact: Construction remains the worst affected, with insolvencies driven by rising costs and an unstable market.
With energy price hikes and tax increases on the horizon, financial risk management is more critical than ever. Creditsafe’s real-time insights and risk monitoring tools help businesses stay ahead of potential insolvency risks before they escalate.
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Chapter 1
Insolvencies by Month
Total number of insolvencies by month.
February 2025 saw 2,364 UK businesses close their doors — a 28% jump from January, yet 10% lower than this time last year. Although the numbers point in the right direction of a stabilising market, dig deeper, and the reality is far from complex.
With rising overheads, cautious consumer spending, and the looming threat of energy price hikes and council tax increases, UK businesses are bracing for continued months of financial challenges ahead. However, another wildcard could be just around the corner: the possibility of tariffs under the leadership of President Trump. Should this become a reality, it could further disrupt supply chains and inflate costs for businesses reliant on imports.
The construction sector remains the hardest hit, accounting for 19% of all insolvencies in February, with 448 businesses shutting down. Continued supply chain disruptions, escalating material and labour costs, and weak demand continue to batter the industry. The impact of new tariffs could intensify these issues, making it harder for construction firms to secure affordable materials, and pushing more businesses to the brink.
The 3% inflation rate is exacerbating pressures, as the cost of materials and wages continues to rise. With uncertainty surrounding future demand and ongoing financial challenges, the outlook for the sector remains grim.
For businesses looking to proactively manage these risks, Creditsafe’s platform offers real-time updates and advanced monitoring tools, providing the insights necessary to navigate an unpredictable insolvency landscape effectively.
Chapter 1
Insolvencies by Sector
The total number of insolvencies by sector YTD.
The table below provides a year-to-date (January–December 2025) breakdown of insolvencies by sector, comparing trends over the past four years (2021–2025) to highlight sector-specific shifts and challenges.
Want to explore the data for yourself?
Whether you want to understand the impact of Insolvencies across a group of sectors or the likelihood of an individual company becoming insolvent, you can find all of this data and more within the Creditsafe platform.
Chapter 1
Methodology
Creditsafe uses the following statuses to determine if a company has become insolvent and will count insolvency based on its first insolvency trigger from one of the statuses below:
- In Liquidation.
- Administrator Appointed.
- Appointment of Liquidator.
- Meeting of Creditors.
- In Administration.
- In Receivership.
- Administrative Receiver Appointed.
- Administration Order.
- The company is wound-up.