The percentage of Welsh construction firms at heightened risk of insolvency sits comfortably below the UK average, according to the latest research by insolvency and restructuring trade body R3.

With 37.6 per cent of firms at increased risk, the sector sits just over two per cent below the UK average of 39.7 per cent.

Only the construction sectors in the North West, London, and Northern Ireland fare better, at 37.4 per cent, 37 per cent, and 34.8 per cent respectively.

However, the March research shows that the percentage of construction firms at heightened risk of insolvency increased by 3.8 per cent from February’s figures, closely matching the construction sector’s UK-wide increase of 3.9 per cent.

Louise Durkan, chairman of R3 in Wales and a director at Deloitte, said: “Resting just below the UK average, while rising at the same rate, will come as encouraging news for many Welsh construction firms, and signals a hopeful outlook for the region after a challenging start to the year.

“According to recent figures from the Office for National Statistics, January saw the UK’s construction sector contract for the ninth month in a row, fuelled in part by increases to the cost of imports, a fall in the number of new homes being built, and the strain on the sector’s supply chains.

“However, for Wales at least, a number of new projects in the pipeline, and a rapidly rising Cardiff skyline, look to be helping the construction sector weather the storm."

Of all 10 key industry sectors monitored by R3 in Wales, construction had the seventh highest percentage of firms at heightened risk of insolvency, followed by agriculture (43.2 per cent), technology and IT (47.7 per cent), and the professional services sector (49.5 per cent).

The restaurant sector saw the lowest percentage of firms at heightened risk of insolvency of all sectors in Wales at 31.9 per cent.