Insolvencies down in Yorkshire
THE NUMBER of insolvencies in Yorkshire dropped by 12% in 2007 against a national average fall of 7%, according to new research.
Analysis of administration and receivership figures by Deloitte revealed there were 294 insolvencies in the region last year, down from 334 in 2006.
Deloitte said the findings showed that for the majority of the year the UK economy remained relatively healthy, with record levels of corporate finance deals completed and an abundant availability of cheap credit.
Elsewhere in the UK, East Anglia saw the biggest drop in insolvencies, from 62 to 42, while the North East saw the largest increase, from 46 to 51.
Adrian Berry, reorganisation services associate partner at Deloitte, said: “The effects of the summer's credit crunch are beginning to be felt by consumers as we are now seeing the downward pressure on housing prices and tighter credit terms, leading to a reduction in discretionary spend.
“Until recently there was a relatively positive environment with insolvency appointments in decline and businesses were working together with lenders to restructure and refinance, avoiding an insolvency event occurring. We are now entering a more demanding credit climate where the prospects of solvent rescue will be less, and this will feed into the numbers over the coming months.”
“We had a positive beginning to last year but have had to a difficult start to 2008. and will look to see if any patterns start to emerge as we progress through the year.”
Mr Berry said last year's figures across the UK were “relatively benign”, with the sectors with notable increases in insolvency appointments being healthcare and social services (18%) and the hospitality and leisure industry (15%).
He added: “There have been a number of factors hampering the hospitality and leisure sector, including increasing price competition from supermarkets, growing trends of drinking and entertaining at home, and more recently the smoking ban.
“In addition, the failure of any of our home nations to qualify for Euro 2008 will impact on those businesses that were already counting on revenues connected to the tournament. We anticipate that the general downturn will further dent discretionary spend, and that the industry will be hit further.”
Looking at the coming year, Deloitte expects to see the effects of the economic downturn materialising in a number of sectors, including the property sector, construction trade and related financial service providers such as mortgage brokers and estate agents.
