East Midlands businesses contribute to 7% of UK administrations
East Midlands businesses made up 7% of total administrations in the first six months of the year, ranking as the UK’s sixth highest region, according to research conducted by Shakespeare Martineau.
Some 759 businesses, 51 of which came from the East Midlands, initiated administration proceedings from January 1st to June 20th, reflecting a 22% surge compared to the previous year.
Retail, manufacturing, construction, hospitality and real estate were the sectors that experienced the most significant impact, accounting for 57% of administrations. Leading the statistics, Greater London carried 25% of the filings, followed by the North West with 15% and South East with 11%, as reported by The Gazette Official Public Record.
In particular, the data indicates a significant increase in the retail industry, with business administrations surging from 62 in 2022 to 118 in 2023.
Partner and head of restructuring at Shakespeare Martineau, Andy Taylor said: “Consumer spending is shrinking and footfall on the high street and in restaurants is declining as a result. The pressure is also on businesses as they face higher borrowing costs and energy expenses, so they are being squeezed from both sides.
“There is still uncertainty in the geopolitical landscape, which is impacting business confidence. With cash flow becoming tight, businesses are at a greater risk of going under. Supply chain issues and the rising cost of importing goods, especially in the automotive industry, have created a challenging juggling act for businesses to maintain profitability.”
Although administration levels have not returned to pre-covid statistics (940 in the first half of 2020) an expert in insolvency and restructuring has cautioned that without control over inflation and a halt in interest rates, more businesses are likely to face failure.
Andy Taylor continued: “HMRC is definitely taking a harder line than in previous periods and its threat of enforcement is certainly pushing some businesses towards considering their options, with some seeking administration as an alternative to facing a winding up petition.
“We’re seeing a steady flow of corporate failures. Should some other ‘bad news’ rear its head, then that is only likely to increase. Businesses and individuals need to see interest rates and inflation come down. With a period of stability, we will see confidence increase.”
