Sharp rise in insolvencies in South West over last six months
The number of companies in the South West filing for administration during the first half of the year has risen by nearly a fifth (18.2%), the joint highest of any UK region.
Analysis of notices in The Gazette by Interpath shows there were 65 administrations across the South West in the first six months of 2024, a notable increase on last year’s figures. The increase was the fastest recorded in the UK alongside the Midlands.
The most impacted sectors in the South West & Wales were industrial manufacturing (11 cases), building and construction (11 cases) and business services (nine cases).
Nationally, there were 661 administrations, representing a marginal rise on the same period last year (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.
Lee Swinerd, head of Interpath Advisory’s Bristol team, said: “A certain level of administrations is to be expected as part of the natural economic rhythm, but the fast growth rate will be a concern and show that, despite the tempering of inflation and economic instability, the long tail of these factors continues to be felt across the region.
“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. The figures indicate that the sectors that are really facing the brunt of economic transformation, notably retail, construction, and industrials, which have all battled with the squeeze on margins.
“The next few quarters will be critical to see whether we settle at those historic levels of distress or administrations push beyond that. 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.”
