Company failure rates slump
THE rate of company failures dropped by 30% in the North West last year, according to new figures from accountancy firm Deloitte.
The total number of firms being placed into administration in the region last year dropped to 391, compared with 555 in 2009. However, failure rates began to pick up again during the last quarter of the year.
Bill Dawson, reorganisation services partner at Deloitte’s Manchester office, said: “Whilst 2010 administration statistics may have improved, the reality is that many companies are still walking a tightrope, as we can see from the recent rise in administrations in the North West.
“A large number of struggling companies were able to stay afloat because of low interest rates, a lenient approach by lenders and HMRC’s favourable Time to Pay scheme. However, the rapidly changing economic environment may mean this is more difficult to sustain.”
The firm said that nationally property and construction firms continued to be hardest hit – one in five of all UK failures was from the sector.
“Risk of insolvency plays a big part in the property and construction industry because of its heavy reliance on supply chain relationships,” said Dawson.
