UK businesses bolstered as insolvency levels plummet
The number of UK businesses filing for insolvency has dropped to its lowest level in eight years, according to a study by PriceWaterhouseCoopers (PwC), the multinational professional services firm headquartered in London.
According to the study, in Q1 2013 the number of UK businesses falling into insolvency was at its lowest level since 2005, and the number of company’s entering voluntary arrangements with their creditors (CVAs) now at ten year low.
In the first three months of 2013, the number of businesses going into insolvency was 3,285; a dramatic fall in 2012’s first quarter result of 4,412. The statistics show that there were 1,127 fewer businesses closing their doors compared to the same time last year.
Sectors hit hardest by the figures were construction, retail and manufacturing, with the statistics reflecting the difficult times for a retail sector failing to follow the overall downward trend.
In the report, PwC Partner Mike Jervis said: “Some believe that the period of recovery immediately after recession creates more company insolvencies as asset values rise because creditors can take advantage of this and management over-trades.
“The challenge now is for the survivors to work out how to grow in what remains a stagnant UK environment.”
The study’s findings are suggestive of an early return of confidence for UK businesses, displaying improving conditions and also a hopeful sign of some economic recovery.