Positive Signs in Insolvency Figures

3,605 UK companies entered formal insolvency proceedings during the fourth quarter of 2010, seeing a 19% fall on the same period in 2009, according to PricewaterhouseCoopers.

The latest insolvency statistics from PwC show that the level of insolvencies fell steeply during the latter half of 2010, although the construction and manufacturing sectors continue to be the most vulnerable.

The figures show that in total, 15,894 companies became insolvent in 2010, a drop of 3,618 on the 19,512 corporate insolvencies for the whole of 2009.

The 3,605 insolvencies for the fourth quarter was also a six% drop on the previous three months.

Mike Jervis, partner at PwC, said, “Insolvency numbers are back to those seen in 2008. 2008 was a year of contrasts, pre and post 15 September, when Lehman Brothers filed for bankruptcy.”

He also added, “2010 has seen insolvency volumes stabilise as businesses are proactively managed in intensive care and options other than insolvency are pursued with vigour. However, UK businesses are certainly not out of the woods yet, as we expect looming public sector cuts to hit the bottom line of many public sector suppliers.”

Jervis believes that the demise of Rok in November 2010 showed that companies in the construction and service industries are still vulnerable. He said it was “telling” that overall construction insolvencies during 2010 were still 15% higher than those experienced in 2008.

PwC’s statistics reveal that 565 companies and 410 manufacturing firms became insolvent in the fourth quarter of 2010. The retail sector suffered 399 business failures while 237 firms in the hospitality and leisure sectors underwent insolvency.

London continued to have the highest level of insolvencies with 875, but this was still down 24% year on year.

Posted at 04:48PM Jan 10, 2011 by Marc Stenton in Insolvency  |  Comments[0]