UK Construction Sector Report – December 2024
Insolvency risk in the construction sector will remain much higher than the national average.
Tokio Marine HCC have released their construction sector report for December 2024 which outlines challenging operating conditions throughout the sector.
On a positive note, overall business optimism is rising, with overall sector output forecasted to increase by 2.5% in 2025 and 3.8% in 2026.
The new Labour government has re-implemented mandatory housing targets and, while UK construction will face a higher tax bill, it can also benefit from increased public investment.
However, the sector will continue to see elevated credit risk levels as a result of slim profit margins and fixed price contracts.
The collapse of ISG, the UK’s sixth-largest construction company by turnover in September 2024, highlighted the elevated levels of credit risk in the sector. While insolvency risk has likely peaked, it will remain above pre-Covid levels for the foreseeable future.
According to a 2023-study, large construction companies in the UK pay around 20% of their invoices late which can put a strain on smaller companies towards the bottom of the supply chain.
Trade Credit Insurance can protect your business in the event that one of your debtors enters insolvency. We placed a number of policies within the construction industry in 2024, allowing our new clients to grow their businesses with the knowledge that they’re protected.
Contact us today to learn more and discuss your requirements.
You can read the full report from Tokio Marine HCC here.