National insolvency figures out today show 700 construction companies went out of business. That number is expected to hit 1,000 when the figures for compulsory liquidations are released by the authorities.

The statistics show that 50% more construction companies entered Company Voluntary Arrangements in the last three months than during the previous quarter.

During the same period the number of construction companies forced into receivership dropped by 32% while the overall construction insolvencies decreased by about 4.5%.

Across all industries  the number of company insolvencies decreased by 8.4% on the previous quarter and by 17.8% on the same period a year ago.

Alan Harris, partner at commercial risk specialist CR Management, said: “This is a loss of approaching 1000 companies from our industry in just three months and I predict this is about to get worse.

“The hung Parliament today will cause uncertainty for the next six to nine months and will prolong the recession in the construction industry.

“Construction in the private sector has already been affected by banks unwillingness to lend, and it is likely that public spending will now also dry up.

“As a result we expect to see the number of construction company insolvencies rise over the summer and continue through to the end of the year and into 2011.

“There will remain a lack of confidence in the private sector until there is a clear government with explicit capital expenditure spending plans and a relaxation of bank lending policies.”