NW administrations fall, but remain highest outside London

The number of companies in the North West filing for administration during the first half of 2024 has dropped by 3.8% compared with the corresponding period last year.

The latest figures from Interpath Advisory show that business services, retail, logistics and construction stood out as hotspots for distress in the region.

Analysis of notices in The Gazette by Interpath shows there were 125 administrations across the North West in the first six months of 2024, a small drop against last year’s figures (H1 2023: 130).

However, the region remained most prominent for administrations outside London, accounting for nearly a fifth of all cases in the UK (18.9%).

The most impacted sectors in the North West were business services with 18 cases, retail and building and construction both with 15 cases, industrial manufacturing with 13 cases, and logistics with eight cases.

Nationally, there were 661 administrations in H1 2024, representing a marginal rise on H1 2023 (657 cases).

The consumer markets sector continued to dominate insolvency activity with 123 administrations over the first six months of the year, of which nearly half (61 cases) were in retail. This was followed by building and construction with 101 cases and industrials with 100 cases.

Rick Harrison, Managing Director and head of Interpath in the North West, said: “The North West has a significant business community of scale so a certain level of administrations is to be expected as part of the natural economic rhythm.

“While the rate of administrations fell slightly compared to last year, the absolute numbers have largely held firm and still place the North West top outside of London for business distress.

“This comes when, at a national level, corporate administrations are back running at pre-pandemic levels as the economy shakes out underperforming and unsustainable businesses.”

He added: “The figures show us the sectors that are really facing the brunt of economic transformation, notably retail, construction, logistics and industrials, which have all battled with the squeeze on margins through a period of high inflation. This is reflected in the stats we see coming through regionally in the North West.

“The next few quarters will be critical to see whether we settle at those historic levels of distress nationally or administrations push beyond that, and if the North West also follows suit after this marginal drop in cases.

“Business leaders will be looking for a period of stability from the new government that can foster economic confidence and improve visibility of future trading conditions, which is incredibly important for conversations with lenders, customers, and suppliers.

“Of course, administrations can also be a symptom of businesses not being able to keep pace with growth or an evolving economic landscape – a reminder that the evergreen principles of sound financial management and the ability to continually adapt and evolve continue to apply.”