Decline in Insolvencies in 2010
2010 saw a significant fall in the amount of corporate insolvencies in 2010 as more companies fought back against the economy to avoid going bust.
Figures showed that companies going insolvent dropped from 19,512 to 15,894 in 2010, according to figures released by PricewaterhouseCoopers which is a 23% decline. It is understood that these are the lowest levels of insolvencies since 2008 which coincided with the fall of Lehman Brothers.
Quarterly figures were also encouraging with the 3,605 companies who went insolvent in the last quarter of 2010 representing a 19% decrease on the corresponding period for 2009 and a 6% decrease on the previous quarter. Although 565 construction firms and 399 retailers went into insolvency in 2010 PricewaterhouseCoopers did declare that even the worst affected sectors had also shown significant improvements when compared to 2009.
Mike Jervis, business recovery services partner at PwC, said: “2010 has seen insolvency volumes stabilise as businesses are proactively managed in intensive care and options other than insolvency,” (such as debt collection), ” are pursued with vigour. However, UK businesses are certainly not out of the woods yet, as we expect looming public sector cuts to hit the bottom line of many public sector suppliers.”
PwC did warn that construction and manufacturing continued to be viewed as the sectors most at risk of insolvency in 2010, with retail, hospitality and real estate industries continuing to struggle. PwC also warned that this year public sector cuts would have a negative effect on suppliers.