While the current economic slump continues, the number of corporate insolvencies is set to increase by an annual rate of around 10%, a new report from PricewaterhouseCoopers (PwC) has warned.

According to research carried out by the accountancy firm, falling consumer confidence and a turbulent property and mortgage market will see the retail and construction sectors hit the hardest over the coming months, with this trend already being seen across the UK.

Over the second quarter of 2008 alone, 449 construction companies filed for insolvency, a 35% increase on the same three months of last year, while the retail sector also saw a 28% increase in insolvencies over the same period.

"It is clear that the consumer downturn is now starting to have a real effect on the construction industry, but the slowdown in the industry is not yet fully visible," commented Barry Gilbertson, a partner at PWC.

"A large number of the construction insolvencies are sub-contractors to the housing industry whose pipelines of work have all but dried up following the slowdown in residential property as many projects are mothballed or stopped before they even begin."