Q3 2019 insolvency statistics – R3 response
Commenting on the Q3 2019 (July-September) England & Wales insolvency statistics (published this morning by the Insolvency Service), Duncan Swift, president of insolvency and restructuring trade body R3, says:
Underlying corporate insolvencies (seasonally adjusted) rose by 0.4% in Q3 2019 compared to Q2 2019, and rose by 1.6% compared to Q3 2018.
“Today’s figures are further evidence that the economic and political turbulence of the last 12 months has taken its toll on businesses. Uncertainty and stop-start stockpiling are among the factors hitting recruitment, investment, and wider business health, and we’re seeing more businesses worrying about their cashflow levels and their order books over the next quarter and the next year.
“Businesses and consumer concerns about Brexit, the political uncertainty in the UK and the direction of travel of the UK’s economy are generally depleting order books, and there are other issues as well. Bricks and mortar retailers are still grappling with the challenges posed by online rivals, while manufacturing output and confidence is low. Car sales and manufacturing have declined, and the construction industry is suffering.
“Numbers of administrations, a procedure designed to support business restructure and rescue, have increased by 20% since the last quarter, and are at their highest since the first quarter of 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.
“Economic uncertainty is putting corporate customers and consumers off from making big purchases. Many consumers will be focusing on the essential items, while personal finance worries are higher now than they’ve been for many years.
“For some businesses, restructuring through an insolvency procedure is the best means of dealing with stalled growth.
“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 have in terms of business rescue.”