Last year, the construction sector saw 4,032 insolvencies, making up 17% of all industry cases.

Commenting on the latest figures, Kelly Boorman, national head of construction at RSM UK, said: “The latest rise in construction insolvencies shows the extent of the debt burden and distress in the supply chain.

“We’ve seen the volume of M&A transactions jump sharply in the industry, reflecting the challenges of an aging workforce and a lack of investment in technology to fill the labour gap.

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“Much of this M&A activity is to consolidate existing workforces, but businesses also need support to raise working capital and attract skilled labour to ensure long-term growth. 

“Government has recently announced its plans to slash red tape to accelerate the training of workers in key industries like construction to boost economic growth and realise its target of 1.5 million homes.

“However, there are concerns that even with government intervention, this isn’t enough to enhance the industry’s skilled workforce and address the 250,000-person labour gap.

“We’re also seeing a lag in mobilisation of large infrastructure projects, with businesses sitting on their hands waiting for the green light from government as well as being held back by procurement.

“The pace of project starts is therefore causing some frustration, making it difficult for businesses to commit.

“Although there’s plenty of large infrastructure projects to tender and carry out, this could prove difficult to manage as consolidation and an aging workforce will put strain on delivery.

“Industry urgently needs incentivisation to invest in technology, improved access to working capital, and acceleration of skilled workers to ensure targets are realised.”