The sector insolvency league table
When a business fails, the headlines usually report a single national total. That number hides enormous variation between sectors. Using the Insolvency Service's industry-level data on company insolvencies, compiled in our UK Sector Insolvency League, we can rank every SIC section by its share of insolvencies in the trailing twelve months to June 2026, and by how much each sector's insolvency count has changed over the past decade.[1]
Across England and Wales, 23,151 company insolvencies were recorded in the trailing twelve months, plus a further 429 that could not be matched to a SIC section at the time of filing.[1] The top three sectors alone, construction, wholesale and retail trade, and accommodation and food service, account for 45.4% of that total.
| Rank | Sector | TTM insolvencies | Share of total | Change, 2016 to 2025 |
|---|---|---|---|---|
| 1 | Construction | 3,805 | 16.4% | +54.4% |
| 2 | Wholesale and retail trade; repair of motor vehicles | 3,463 | 15.0% | +82.6% |
| 3 | Accommodation and food service activities | 3,233 | 14.0% | +119.7% |
| 4 | Administrative and support service activities | 2,196 | 9.5% | +43.2% |
| 5 | Professional, scientific and technical activities | 1,930 | 8.3% | +66.6% |
| 6 | Manufacturing | 1,857 | 8.0% | +44.2% |
| 7 | Information and communication | 1,393 | 6.0% | +65.3% |
| 8 | Real estate activities | 975 | 4.2% | +103.4% |
| 9 | Other service activities | 965 | 4.2% | +91.8% |
| 10 | Transportation and storage | 704 | 3.0% | +117.3% |
| 11 | Human health and social work activities | 642 | 2.8% | +103.0% |
| 12 | Financial and insurance activities | 494 | 2.1% | +73.2% |
| 13 | Arts, entertainment and recreation | 469 | 2.0% | +112.8% |
| 14 | Education | 248 | 1.1% | +46.5% |
| 15 | Water supply, sewerage, waste management and remediation | 144 | 0.6% | +10.7% |
| 16 | Agriculture, forestry and fishing | 82 | 0.4% | +97.8% |
| 17 | Electricity, gas, steam and air conditioning supply | 58 | 0.3% | +23.4% |
| 18 | Public administration and defence; compulsory social security | 28 | 0.1% | +150.0% |
| 19 | Mining and quarrying | 25 | 0.1% | -50.0% |
| 20 | Activities of households as employers | 8 | 0.0% | +125.0% |
| 21 | Activities of extraterritorial organisations and bodies | 3 | 0.0% | -25.0% |
These are gross counts of insolvency events by sector, not a failure rate against the number of active companies in each sector. A large sector with many active firms, such as construction or retail, will generate more insolvencies in absolute terms than a small sector even if the underlying risk per firm were identical.[1] The ranking still matters, because it shows where the volume of business failure is concentrated, and therefore where the payment-chain and supply-chain risk to other businesses is greatest.
Why construction, retail and hospitality lead
Construction: long chains, retentions and fixed-price contracts
Construction's 3,805 trailing-twelve-month insolvencies (16.4% share) reflect several structural features of the sector. Contracts are frequently agreed at a fixed price before the final cost of materials and labour is known, so a period of cost inflation compresses margins on work already committed to. Payment chains run through several tiers, main contractor, subcontractor, sub-subcontractor, and a portion of each payment is often held back as retention money until practical completion or the end of a defects liability period. Subcontractors, typically the smallest and thinnest-margined firms in the chain, are usually the last to be paid and the first to feel a cashflow squeeze when a contractor further up the chain runs into difficulty. The sector's insolvency count has risen 54.4% since 2016.
Wholesale and retail trade: margin pressure and discretionary demand
Wholesale and retail trade's 3,463 insolvencies (15.0% share) reflect a sector operating on thin margins against high fixed costs, rent, business rates, staff and energy, while competing against online retailers with lower overheads. Retail demand is also discretionary: when household budgets tighten, retail spending is often the first area consumers cut back. The sector's insolvency count has risen 82.6% since 2016, the second-fastest decade change of the top three.
Accommodation and food service: the fastest-deteriorating of the top three
Accommodation and food service's 3,233 insolvencies (14.0% share) sit just behind retail by current volume, but the sector's decade trend is the steepest of any major sector: up 119.7% from 2016 to 2025. Hospitality businesses typically carry high fixed costs relative to revenue, rent, energy and staff chief among them, combined with thin margins and limited pricing power against price-sensitive, discretionary consumer demand. A sector that was already running close to the margin before a cost shock has little room to absorb one.
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Early-warning signs to watch if you operate in a high-risk sector
The sectors at the top of this table share the same underlying pressures: long or uncertain payment terms, thin margins, and heavy exposure to a small number of contracts, customers or seasonal cashflow swings. If your business sits in construction, retail or hospitality, the following signs are worth monitoring, individually and in combination.
- Cashflow deteriorating despite stable or growing revenue. Rising sales with falling cash in the bank usually means your customers, or a main contractor, are taking longer to pay than they used to.
- Payment terms stretching. If a customer or contractor who used to pay in 30 days is now taking 60 or 90, that is a direct signal of their own cashflow pressure, and it becomes yours the moment you rely on that payment to cover your own costs.
- Rising customer or contract concentration. If a growing share of your revenue depends on one or two customers or contracts, a single non-payment or contract loss has an outsized effect on your business. This is a particular risk for subcontractors tied to one or two main contractors.
- Subcontractor and supplier exposure. In construction, retention money withheld by a contractor further up the chain is money you have already earned but cannot yet spend. Track retentions separately from ordinary debtors and chase them on schedule.
- Difficulty meeting VAT or PAYE on time. Falling behind on tax payments is one of the clearest practical signals that day-to-day cashflow no longer covers day-to-day obligations. HMRC's Time to Pay arrangements exist for exactly this situation, and using one early is a normal, sensible response, not a sign of failure.
- Growing reliance on invoice finance or an overdraft to cover routine costs. Using short-term finance for a specific purchase or a seasonal gap is normal. Needing it every month just to pay staff and suppliers is a sign that the underlying trading position, not just the timing, needs attention.
No single sign on this list means a business is in trouble. Several appearing together, especially against the backdrop of a sector where insolvency counts are already rising, such as construction, retail or hospitality, is the point at which speaking to your accountant about cashflow forecasting and credit control is worth doing early rather than waiting for a crisis. Our bookkeeping and compliance page covers the record-keeping and monitoring habits that catch these signals early. For the pressure that late-paying customers put on your own cashflow specifically, our UK Late Payment Index tracks how payment terms have moved across sectors. Business formation and closure trends by local area are tracked in our UK Business Density Map, and wider small business sentiment is covered in our UK Small Business Barometer.
Reading the league table alongside your own numbers
The sector insolvency league is a useful map of where business failure is concentrated across the UK economy, but it is not a prediction about any individual business. A construction firm with disciplined credit control, short payment terms and a diversified client base carries a very different risk profile from one relying on a single main contractor and slow-paying retentions, even though both sit in the sector with the highest insolvency share. The value of the sector data is in knowing which structural pressures apply to your industry by default, so you can check whether your own business is exposed to them or has taken steps to manage them.
The full monthly and annual series behind this article, updated as new Insolvency Service releases are published, is available on our UK Sector Insolvency League.
- The Insolvency Service, "Company Insolvency Statistics -- Industry Tables (Table A1a)," data through June 2026, published 2026. gov.uk/government/statistics/company-insolvencies-june-2026. Figures compiled by SIC 2007 section in our UK Sector Insolvency League. Data sourced under the Open Government Licence v3.0, coverage England and Wales.