Today’s official insolvency figures which show a fall in the number of business failures indicate that the pressure on businesses is starting to ease, according to the insolvency trade body R3.
The figures from the Insolvency Service show there were 557 administrations in the first quarter of 2013, down by 28.5 per cent on the same period last year, while company liquidations also fell by 15.8 per cent year on year.
R3’s North West regional chair Jeremy Oddie said the figures confirm findings from R3’s own research, released earlier this week, showing that distress levels amongst businesses in the North are at their lowest levels for over two years.
Two-thirds (67 per cent) of businesses in the North now show no distress indicators at all, compared to 43 per cent a year ago, while 59 per cent of businesses are showing signs of growth.
Jeremy Oddie, who is also a head of recoveries at accountants Mitchell Charlesworth, said: Today’s drop in corporate insolvency could signal that pressure on businesses may be starting to ease. However, growth remains hesitant and, with rising fuel and utility costs on the one hand and reduced consumer spending on the other, many businesses still feel they are being squeezed from both sides.”
Personal insolvencies continued to fall in the first quarter of 2013 and are now back at the levels they were in 2008. There were 25,006 personal insolvencies during the quarter, down by 12.9 per cent on the same period the previous year. The figures include bankruptcies, Individual Voluntary Arrangements and Debt Relief Orders.
Jeremy Oddie added: “The fall in individual insolvencies is surprising, given that the rising cost of living and the failure of wages to keep pace. R3’s research shows that rising living costs are now the main factor pushing North West families into debt, outstripping traditional factors such as job loss or relationship breakdown,
“While the figures give cause for optimism, we are urging the government to review the £700 up-front fee for bankruptcy and the criteria for Debt Relief Orders to ensure that people who are struggling with debt are able to access the most suitable solutions.”