Company Insolvency’s Fall in 2010

The number of UK companies becoming insolvent decreased by a dramatic 20% in the second quarter of 2010. In the same quarter in 2009, there was a plunge of 28%.

What do these figures show ?

These figures could show that the economic pressures on UK businesses are beginning to ease and that more “Normal” trading conditions will begin to return. With such a drastic fall this could mean that access to funding and investment is now returning to a more stable point in the market.

Do these figures show a true representation of the insolvency market ?

These statistics are showing an untrue picture of the current marketplace due to other forms of business turnaround. Insolvency Practitioners and Turnaround Specialists are now able to look at company voluntary arrangements and financial restructuring, instead of liquidation. This could show a lift in the market but does not confirm growth.

Construction, Manufacturing and Retail still remain the worst affected sectors. These sectors still act as a good financial barometer for growth. Overall we can see a decrease in the insolvency market, however it is too early to tell if this is growth or a change in conditions.

By Gareth Fawke