NW firms warned to prepare for ‘tough second half’ as insolvencies hit 10-year high

North West businesses face a “tough second half” after corporate insolvencies hit a 10-year record.

Insolvency expert Allan Cadman said: “The current headwinds are only likely to get worse before they get better.”

The latest government statistics show there were 5,629 seasonally adjusted corporate insolvencies in the second quarter of the year, an increase of 13% on the first quarter and up 81% on the second quarter last year.

Mr Cadman, who is North West chair of the insolvency and restructuring trade body R3, said: “These latest figures show the highest levels of corporate insolvency since 2012.

“This has been driven by an increase in all forms of insolvency – but Creditors’ Voluntary Liquidations have peaked to their highest recorded figure of 4,908, suggesting that many directors are opting to close their businesses as they lack confidence in their trading prospects in the current climate.”

He added: “The steady rise in Compulsory Liquidations we’ve seen since the start of the year also suggests that creditors are now making use of their power to issue winding-up petitions to try and claw back monies they are owed.

“Despite May’s unexpectedly positive GDP figures, these latest statistics show that now is not the time to be complacent about the economy.

“The current headwinds are only likely to get worse before they get better, which means North West businesses will have a tough second half of the year.”

And he predicted: “With household disposable income dropping for the eighth consecutive month in June, consumers are having to prioritise household bills before spending elsewhere – and this will have a knock-on effect as businesses won’t see the footfall they are used to.

“This, coupled with soaring costs, supply chain issues and a tight labour market, has meant an uphill battle for many businesses, especially those still reeling from the pandemic.”

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