Construction insolvencies fell by almost a quarter during the last three months of 2011, according to the latest figures from the Insolvency Service.

Administrations fell from 94 in Q3 to 71 in Q4 2011, a reduction of nearly 25%.

Across all sectors, insolvencies were down 30% over the previous quarter. The overall figure of 650 is the lowest experienced in the last four years which peaked at almost double (1209) in Q1 2009.

However, there are suggestions that the lower insolvency statistics for the construction sector maybe a false dawn.

Mark Wilson, head of construction at Baker Tilly, said: “There are concerns that government cuts in new build projects have yet to fully bite whilst the industry continues to complete projects already committed to.

“The overall economic uncertainty and prospects for growth and new jobs will continue to have a dampening effect on the sector.

“Overall, a cautious welcome for this good news. However, there is always a time lag in getting new projects off the ground and therefore the full impact of the delayed economic recovery may yet still to be seen."

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