The Insolvency Service has released its data for the third quarter of 2018 and figures show that the number of company insolvencies has increased by 8.9% making that an increase of nearly 20% year on year.
From June to September 2018, 4,308 companies entered insolvency. This is the first time numbers have peaked that high since the beginning of 2014.
The largest number of insolvencies in the past 12 months have come from within the construction industry followed by wholesale and retail trade and vehicle repair businesses. There have been a number of high profile insolvencies across all of these sectors but what many don’t see is the pressure these insolvencies put on smaller businesses such as suppliers, delivery firms and others.
Research into the main causes of these insolvencies and reasons for the continued increase has flagged up suggestions such as Brexit uncertainty, infrastructure issues (particularly for businesses in the city), negative consumer confidence, and high personal debt levels.
It is thought that while businesses are still in the dark as to what shape the UK’s exit from the EU will take, they themselves are taking much longer to make decisions which may have an impact post-Brexit. This delay in decision making is, in turn, affecting smaller businesses waiting for new contracts or investments.
Businesses based in the city centre face a rising number of worries as a result of infrastructure. Road closures and congestion have been cited for causing delays with deliveries and a loss of productivity amongst staff finding it difficult to get to work every day.
Negative Consumer Confidence and High Personal Debt Levels
The number of individuals who have registered insolvent in the last quarter may have dropped but personal debt levels are still high and research suggests there is still negative consumer confidence meaning businesses, especially those in retail, are struggling to attract the public to spend their hard earned cash.
As you can see, the current outlook for businesses isn’t looking so positive and many face a difficult future. Measures announced in the Chancellor’s recent budget may provide relief but if your business is struggling, it is vital you speak with a solicitor at the earliest opportunity to discuss what options are available.
Farleys’ insolvency solicitors can explain the options available to you business including CVLs. Call the team today on 0845 287 0939 or email us.