Company insolvencies surge in third quarter of 2018
Company insolvencies surged by nearly 20% in the third quarter of 2018 when compared to the same period a year ago, new figures show.
Data from the Insolvency Service revealed a 19.3% jump in company insolvencies between Jul and September this year.
More than 4,300 firms entered into insolvency during that period, of which nearly 3,100 – or 71.6% – were creditors’ voluntary liquidations.
In these instances, the assets of an insolvent company are sold off and the money raised is distributed among creditors prior to the business being dissolved.
Duncan Swift, vice president of insolvency and restructuring trade body R3, described 2018 as a “tough year for English and Welsh businesses”.
“This is the first time we’ve seen more than 4,000 corporate insolvencies in one quarter since the start of 2014,” he noted.
Insolvency numbers have been higher in every quarter of 2018 when compared to the same periods in 2017, which is reflective of tougher trading conditions.
For the 12 month period to the end of the third quarter, the construction sector recorded the highest number of insolvencies – in part thanks to the high‐profile collapse of Carillion at the start of the year.
The wholesale, retail and trade and vehicle repair sectors also had high levels of insolvency, with many firms deciding that to close completely is their only option.
Higher operational costs, as well as rising labour outlays and growing competition are among the key issues influencing business finances.
The key for any business facing financial issues is to act quickly and assess the available options to them.
A wider range of insolvency and restructuring methods should be available if the issues are identified and acted on swiftly.
Personal insolvency numbers dropped by 10.5% in the third quarter when compared to the previous three months of the year, and were down by 2.5% on a yearly basis.
By Phil Smith
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