Insolvencies lower than before recession
Deloitte figures show corporate insolvencies are currently lower than they were in 2006
Corporate administrations are down 36% for the first nine months of 2010
compared to the same period last year according to Deloitte. The figure is a 20%
drop on the same period in 2006, a year before the financial downturn began.
There have been 1,648 administrations this year compared with 2,589 for the
same period in 2009, the report said.
Lee Manning, reorganisation services partner at Deloitte, said: “For the
first time since the financial crisis began, we’re beginning to see a consistent
drop in the numbers of companies hitting the wall. This can only be a good
thing.”
The retail sector saw the most pronounced reduction in administrations as
company collapses fell 50% for the first nine months of this year, compared with
the same period in 2009.
“Certainly the raft of retail administrations we saw at the end of 2008 and
beginning of 2009 sorted the weaker businesses from their more viable
competitors,” said Manning.
However, he warned with the upcoming VAT rise, impact of higher income taxes
and national insurance, it would not be surprising if the country saw more ”
retail casualties” in the future.
Further reading:
Corporate
insolvencies to fall in third quarter
Coastal
cities have highest personal insolvency
Deloitte
administrators in at Jarvis
