Commenting on the Q2 2019 (April-June) England & Wales insolvency statistics Duncan Swift, president of insolvency and restructuring trade body R3, says:
Underlying corporate insolvencies rose by 2.6% in Q2 2019 compared to Q1 2019, and rose by 11.9% compared to Q2 2018.
“Today’s figures are evidence of a difficult period for UK businesses. Tighter constraints on consumers and significant uncertainty about the future of the UK economy and the UK’s relationship with the EU are just some of the key factors at play that are making the business climate a challenging one.
“Questions around what Brexit really means have hit investment and growth levels, and led to a degree of economic stagnation.
“In addition to this, consumer confidence is low, as people worry about the weeks, months and even years ahead. This may mean consumers are only buying what they need.
“Businesses in a variety of industries are struggling right now. Retailers are suffering as the world in which they operate changes and more and more people shop online. Manufacturing output and confidence is low. Private and business car sales are down. And businesses which stockpiled items ahead of the original Brexit deadline of 29 March will now be seeing those decisions have an impact on their cash flow levels. Simply put: it’s an uncertain, difficult time to be in business right now.
“For some businesses, restructuring through an insolvency procedure is the best means of dealing with stalled growth. Although numbers of administrations, a procedure designed to support business restructure and rescue, have fallen back slightly from last quarter, they are still at their second highest quarterly level since 2014. Meanwhile, the increase in Creditors’ Voluntary Liquidations suggests business rescue is more difficult to achieve in the current economic environment, perhaps reflecting greater uncertainty that purchasers can deliver sustainable business turnarounds.
“Any company directors who are concerned about their business or the market conditions it’s operating in should seek advice from a knowledgeable and qualified professional source. The earlier they do, the more options they will have for helping their company recover and start to thrive again.”