Phil MeekinView Profile
Latest statistics from the Government Insolvency Service show a 6.5 per cent increase in total company liquidations in England and Wales in 2011 compared to 2010.
Figures showing the number of administrations within various industries are more telling than those showing the overall number of corporate liquidations, says a leading Sheffield insolvency expert.
Latest statistics from the Government Insolvency Service show a 6.5% increase in total company liquidations in England and Wales in 2011 compared to 2010.
However, industry specific figures showing the rate of companies going into administration vary dramatically.
A 38% increase in administrations within the construction industry this year demonstrates how the building sector is still taking a hit. A 34% decrease in administrations in the transport, storage and communication industry may seem positive news but figures suggest a different story.
Administration figures usually closely mirror liquidation figures as one often leads to the other. While the overall figures show the total of corporate liquidations has increased by 6.5%, the breakdown of administrations within the different industries vary much more dramatically illustrating the effect the recession has had on various trades.
“When the figures from the most recent quarter of 2011 are compared with the same quarter in 2010, almost all industries have seen a rise in the number of companies going into administration. The manufacturing industry has seen an increase of 7 per cent, construction has shot up by 38 per cent, and administrations within the wholesale and retail trade are up 20 per cent, while hotel and restaurant administrations have increased by 26 per cent.
A figure that stands out is the 34 per cent decrease of companies going into administration in the transport, storage and communication industry. Many might assume that this is a sign of improving business within the industry but I’d view this figure with caution. I would say that it illustrates the extreme challenges this industry has faced over the last two or three years. It demonstrates that the haulage and transport companies were the first to be hit hard by the economic downturn and many companies fell early on, leaving fewer companies to go into administration as time progressed.”
A lack of consumer confidence is probably to blame for the continuing increase in corporate liquidations. The Government needs to focus on restoring that confidence.
The overall increase in corporate insolvencies and increase of administrations within the retail and hospitality industries is unsurprising. A focus needs to be placed on improving consumer confidence which in turn should lead to growth for businesses.
It is likely the retail and leisure industries will take another hit in the first quarter of 2012. Those industries usually face a dip once the festive season has passed.
The companies that survive will be the proactive thinkers and those who act in advance.
Putting off seeking professional advice is key to not falling at the first hurdle. Many people find taking that first step a challenging and difficult step, but it is crucial if you’re to survive.
Despite challenging economic times for many businesses, Wilson Field has recently expanded its own portfolio. We have opened an office in the West Midlands, complementing its existing bases in Sheffield, Manchester and Leeds.
We have built a reputation for professional and personal service as well as exceptional industry knowledge. We’re confident we can continue to help businesses across the UK with their business recovery, insolvency and debt solution needs.