Around 3,900 construction firms became insolvent in the twelve months to February 2026, according to Allianz Trade's latest sector analysis. That's roughly 17 per cent of all UK business failures, and the figures aren't expected to improve soon.
For electrical wholesalers and trade suppliers with exposure to the construction sector, these numbers are worth paying attention to. A sixth of your customer base operating in an environment where insolvency risk is running that high means late payments, sudden closures and write-offs become more likely.
The report notes that businesses are adapting through greater use of technology and improved supply chain preparedness. That helps on the margins, but it doesn't change the underlying pressure. Construction remains fragile, and anyone extending credit or holding stock for builders needs to keep that front of mind.
Manufacturing showed better resilience. The S&P Global UK Manufacturing PMI rose to 52.0 in February from 51.8 in January, though demand is still below pre-pandemic levels. It's a steadier picture than construction, but not exactly strong.
The analysis also flagged rising fuel and fertiliser costs tied to the Middle East conflict, with food inflation expected to reach 6 to 7 per cent. That feeds through into wage pressure and operating costs across the board, including for wholesalers managing transport and warehousing.
For acquirers, the environment creates two realities. Distressed opportunities will appear as weaker players exit or consolidate under pressure. But it also raises the bar on due diligence. A business that looks solid on paper might be carrying more customer credit risk than the accounts show, particularly if a meaningful portion of revenue comes from smaller contractors.
Owner-managed businesses with diversified customer bases, tight credit control and limited reliance on speculative builders tend to weather these cycles better. If you're thinking about an exit in the next couple of years, demonstrating that resilience matters more now than it did twelve months ago.