Bankruptcies Are Rising, and Construction Should Pay Attention
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Bankruptcy filings across all U.S. industries have risen meaningfully from their recent lows and are now running above pre-pandemic norms.
Share KEY POINTS Labor shortages and wage growth, material price increases, and surging fuel costs are raising costs and squeezing business margins across industries, including construction. Total monthly bankruptcies hit 2,054 in December 2025, well above the pre-COVID monthly average of roughly 1,900. The second half of 2025 averaged 2,167 bankruptcies per month, signaling that economic stress is being broadly felt across the economy. The faster increase in Chapter 11 filings compared to Chapter 7 suggests that businesses may be struggling specifically with the sustained high-interest-rate environment. A Familiar Squeeze with a New Edge The U.S. economy is generating work, but it’s also generating pressure. For construction firms and their suppliers, the list of cost headwinds has grown familiar. Persistent labor shortages, elevated material prices, and now a sharp uptick in fuel costs driven by the latest Middle East conflicts. Individually, these challenges are manageable. Together, they create compounding margin pressures that can push firms from profitability into financial distress. And the data suggests this is already happening. What the Bankruptcy Numbers Tell Us Bankruptcy filings across all U.S. industries have risen meaningfully from their recent lows and are now running above pre-pandemic norms. In 2022, total monthly bankruptcies bottomed out at roughly 900, artificially suppressed by federal pandemic-era support like PPP loans, enhanced unemployment benef...
