Member Article

Business failures on the decrease

The number of businesses going into administration fell by 15% in the first half of this year compared to the same period in 2006, it has been revealed. Administration figures from business advisory firm Deloitte have shown that there were 1,205 administrations in the first six months of 2007, compared to 1,419 last year. However, though these figures appear encouraging, they should be treated with caution, Deloitte has warned.

Lee Manning, reorganisation services provider, said: “We should not be misled by the current figures, as at Deloitte we are seeing more work dealing with troubled companies, which were acquired from earlier failed enterprises and which are now beginning to fail again with increasing momentum. “Also, the banks are getting more nervous about lending money with interest rate rises beginning to bite, we have seen a marked increase in the rate of business reviews we are being asked to undertake.”

The three sectors that have seen the biggest decreases in administration levels are recruitment and business services, which experienced a 58% decrease, mining, energy and agriculture (34%) and printing and publishing (29%). Regionally, East Anglia saw the largest decrease, followed by the North East. However, in Wales there was a 10% increase, and Scotland suffered a 5% increase.

This was posted in Bdaily's Members' News section by Ruth Mitchell .