The number of construction firms going bust is on the decline, but the industry could still be in danger, research by PwC has revealed.
According to the accounting and professional services firm, 2010 was a better year for firms as 14% fewer companies ceased trading than in 2009.
PwC data indicated that 2,527 firms became insolvent last year, compared with 2,948 in 2009.
Despite this improvement, PwC warned that the industry was still in a perilous position, as the overall number of insolvencies in 2010 was still 15% higher than those experienced in the industry in 2008.
PwC’s construction leader Jonathan Hook said: “The next 18 months are likely to be tough for UK construction as the private sector is not yet recovering sufficiently to fill the gap left by public sector cuts.
“I believe there will be more insolvencies in the sector as companies experience the cash outflow impact associated with a decline in long term contracting volumes.”