Which UK industry sectors are experiencing the most insolvency appointments?

In 2015, according to data from the Insolvency Service, the construction sector faced the most insolvencies in England and Wales. Wholesale and retail trade followed closely as the second-highest. The numbers cover various forms of insolvency, such as compulsory liquidations, Creditors’ Voluntary Liquidations, administrations, receiverships, and Company Voluntary Arrangements.


A tough time for every sector

In today’s economic climate, every industry faces its own unique challenges, like coping with an increased minimum wage and adapting to automatic enrolment. Even if businesses manage the added financial strain from new laws, they still grapple with regular business problems, such as heightened competition, a contracting market, or the understandable urge to overtrade.

Let’s examine the sectors that faced difficulties in 2015, along with the number of insolvency appointments in each industry.


Construction (2,469)

Right now, the construction sector is seeing the highest number of insolvency appointments in England and Wales. The figures for January to March this year are quite persistent, standing at 672.

Some propose that a more collaborative strategy could enhance the industry’s future. Bringing core contractors and suppliers closer to share the unavoidable risks might lead to better outcomes for everyone involved in a project, increasing the likelihood of achieving the best results for the end client.


Wholesale, retail, and motor repair (2,187)

Among this group, the retail trade encountered the highest number of insolvency appointments in 2015, totaling 1,019, while wholesale trade experienced 796 insolvencies. Retailers often grapple with challenges like low footfall, unpredictable weather, and the pressure to slash prices to stay competitive or clear out older stock.

Despite the growth in online sales, retailers are adapting to meet the evolving demands of customers seeking flexibility and convenience in shopping. However, this market tends to yield lower profits for retailers overall.


Administrative and support services (1,682)

In 2015, office administrative, office support, and other business support activities faced the most insolvency appointments within this category, totaling 1,043. Small local companies in this sector typically offer specific administrative and support services to public and private sector firms but struggle to expand due to limited funding.

Even with a deep understanding of their market, these businesses may find it challenging to compensate for the lack of accessible finance needed for development, growth, or even just to stay afloat.


Accommodation and food services (1,504)

The hospitality industry now grapples with the implementation of the new Living Wage introduced in April this year. Numerous hospitality staff have historically received wages at the minimum level, making the impact of increased payroll obligations significant.

With already slim profit margins, this change could exacerbate challenges for the sector in 2016. Employers might have to trim bonuses and other employee benefits to cope with the escalating wage bill.


Manufacturing (1,427)

Manufacturing in China is facing challenges due to a noticeable economic growth slowdown. While British vehicle manufacturing showed substantial growth in 2015, other sectors suffered from tough trading conditions.

The steel industry, in particular, felt the pressure with high energy prices and the influx of inexpensive imports. Significant players in this sector faced difficulties in staying afloat during 2015, compounded by the strength of the pound making it challenging for exporters to sustain previous profit levels.


Professional, scientific and technical (1,049)

The professional, scientific, and technical sectors comprise skilled individuals and firms earning revenue through consulting and professional services. The heightened payroll cost per employee, reflective of their advanced expertise, can pose challenges for businesses in this sector. This struggle becomes more pronounced, especially if specific events or a series of unfortunate circumstances beyond their control lead to a decline in turnover.

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Information and communication (773)

Smaller manufacturers involved in ‘standalone’ PCs and laptops find themselves grappling with a diminishing market, overtaken by consumer demand for tablets and smartphones. The dominance of high-profile household names leaves limited space for smaller companies to compete, leading to narrow profit margins and a lack of growth.

Vanguard Insolvency stands as a significant component of the Begbies Traynor Group, the foremost business recovery firm in the UK. With 100+ offices spanning from Inverness down to Exeter, Vanguard Insolvency provides unparalleled director advice across the UK.

David Jackson MD
Senior Partner at Vanguard Insolvency Practitioners | Website

I am an insolvency professional with a distinguished career specialising in commercial insolvency, adeptly navigating Creditors Voluntary Liquidation, Company Voluntary Arrangements, and Company Administrations. With a comprehensive understanding of insolvency laws and an unwavering commitment to ethical practices.