Administrations across the Midlands jump by nearly 40%

The number of corporate insolvencies seen across the Midlands rose by nearly 40% during the first six months of 2022.

The rise was attributed to spiralling inflation, rising interest rates and energy costs, supply chain disruption and ongoing geo-political uncertainty continuing to pile pressure on businesses.

Analysis of notices in The Gazette by Interpath Advisory reveals that a total of 46 companies based in the Midlands fell into administration from January to June 2022 – up from 33 during the same period in 2021, but still not back at the pre-pandemic levels of 82 in H1 2020 and 84 in H1 2019.

This mirrors the national picture which saw a total of 451 companies fall into administration in H1 2022 – up from 312 companies in H1 2021 but still not at the same levels as before the Covid-19 pandemic.

The rising number of insolvencies in the first six months of 2022 can be seen across a wide range of sectors, with building and construction, industrial manufacturing, and retail industries experiencing the sharpest rises.

Chris Pole, managing director and head of the Midlands team at Interpath Advisory, said: “Businesses across the Midlands continue to be impacted by a range of challenges, from inflation and interest rate rises, to supply chain disruption and staff shortages, not forgetting the war in Ukraine and now political uncertainty on the home front with the impending change in Prime Minister.

“Inflation is proving to be a particular challenge for local businesses, as they tread that fine line of how much they can pass rising input costs on to customers, while wrestling with the conundrum of balancing pay rises against double-digit inflation.

“With five consecutive interest rises over recent months, plus fuel and energy costs continuing to rise, there’s no surprise that both consumers and businesses alike are thought to be preparing for the challenges to come later this year.”