ABSTRACT
Unfortunately, insolvency is a common occurrence within the UK construction industry. Its causes are various. Certainly, the ease with which contracting businesses can be created, due in part to the minimal amount of capital investment required to start a construction firm, often gives rise to some very fragile arrangements. The capital goods nature of construction industry products, together with the large proportion of industry output flowing from often widely fluctuating and unpredictable levels of public expenditure, has created a ‘boom and bust’ construction industry cycle. This is often cited, particularly at times of recession, as a cause of mass insolvency.
