A war a thousand miles away landed on UK building sites within weeks. Russia’s invasion of Ukraine in February 2022 sent energy and material prices soaring, pushing construction-cost inflation into double figures and turning fixed-price contracts into loss-makers. Public statistics record the resulting wave of construction insolvencies after the fact. GalimAI’s data does something more useful - it shows which developers and property companies are carrying that strain now. This study reads the shock from that proprietary view.
What GalimAI’s own data reveals
Insolvency tables are a record of who already failed. GalimAI’s data is a leading view of who is straining. Across the 463,022 property-owning companies and more than 1,000,000 owners it maps sit the developers, contractors-as-owners and project SPVs whose margins a cost shock erodes first - each linked to its directors, financing and distress signals.
That lets GalimAI isolate the exposed cohort rather than wait for the national total: the most heavily-leveraged companies with thin contingency, those under bridging-finance pressure on stalled sites, and the dissolutions our data tracked as projects became unviable. GalimAI’s regional distress map shows where this concentrates - the towns where development companies cluster.
For a funded buyer or counterparty that is the edge: the development company that priced a fixed contract before the shock and cannot deliver it after - and the part-built sites likely to change hands - are visible at company level in GalimAI, so the owner can be reached directly.
What changed: a cost shock from a war
Russia invaded Ukraine in February 2022. Within months, construction tender-price inflation was running at 8–10% for the year, with analysts attributing 3–5 percentage points directly to the war. Average building-material costs rose about 10%, and energy-intensive materials - bricks, cement, steel, glass - rose around 20% as European gas and power prices spiked.
Because construction contracts are often fixed-price and long-dated, those input increases fell straight onto contractor and developer margins. Timber, steel and brick shortages added delay on top of cost.
The public backdrop
Construction was the worst-hit sector in the insolvency figures that followed: about 4,371 construction-company insolvencies in 2023, close to one in five of all cases, well above pre-pandemic levels. That is the lagging public confirmation; GalimAI’s 463,022-company map, with distress signals attached, is the leading indicator of which companies join them.
The most plausible mechanism
A geopolitical shock raised input costs on contracts that had already been priced, compressing or erasing developer margins and pushing the weakest into insolvency 12–24 months later. The channel here is input cost, distinct from the refinancing channel of the rate shock - though many companies felt both. We present this as a strong correlation with a clear mechanism, not proof that the war alone explains any single failure.
Sources
The proprietary figures in this study (the 463,022 companies, 1,000,000+ owners and the distress signals) are GalimAI first-party data. The public background figures are drawn from:
- The Construction Index - Ukraine invasion sends UK construction inflation into double figures
- Insolvency Service - company insolvency statistics (construction sector)
Frequently asked questions
What does GalimAI's own data add here?
It identifies the strained developers before the insolvency tables do. GalimAI maps 463,022 property companies and 1M+ owners with live distress signals - leverage, bridging exposure, Gazette notices, dissolutions - so the construction and development cohort hit by the cost shock is visible at company level.
How did the Ukraine war affect UK construction costs?
It drove construction-cost inflation into double figures in 2022 - around 8 to 10% for the year, with 3 to 5 points attributed directly to the war. Materials rose about 10% on average and energy-intensive materials around 20%.
Did it cause construction insolvencies?
Higher input costs on fixed-price contracts squeezed developer margins, and construction was the worst-hit insolvency sector in 2023 - a strong correlation with a clear mechanism. Rates, demand and contract terms also mattered, so it is not the only cause.
How can investors use this?
The development companies that cannot deliver pre-shock contracts, and the part-built sites likely to change hands, are visible at company level in GalimAI.