PwC: corporate insolvencies on downward spiral

Corporate insolvencies are rapidly declining according to research from PwC.

An analysis by the firm found the number of failed businesses to become
insolvent in the second quarter of 2010 fell by 21% compared to the previous
quarter, and 28% compared to the same period in 2009.

Mike Jervis, partner in business recovery services PwC said: “At PwC we are
seeing a fall in the number of administrations as businesses are starting to
look at other options before insolvency is used as a last resort.

“Financial restructuring, company voluntary arrangements and schemes of
arrangement are being used as businesses are now starting to realise the sooner
problems are identified, the quicker a solution can be found.”

Real estate continues to be the worst affected sector which saw a 3%
increase in insolvencies compared to the last quarter.

Other badly affected areas such as construction and manufacturing saw a
significant fall in insolvencies of 24% and 37% respectively.

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