According to the DTI, there were 3,789 company insolvencies in England and Wales during the second quarter of this year, up 9.3% on last year and 2.6% more than in the first quarter of 2001.
Individual insolvencies also grew, although not at such an alarming rate. In the second quarter of 2001, 7,634 individuals were declared bankrupt compared to 7,514 in the same period last year and 7,433 in the first quarter of this year.
Administrations rose 13% during the period increasing for the third successive quarter. Big Five firm PricewaterhouseCoopers said the increase showed the popularity of the process in the UK, adding impetus to the insolvency white paper published last week.
According to PwC, a slowdown in the manufacturing sector was one of the main factors causing the increase.
Business recovery partner Neville Kahn said: ‘The collapse in demand from overseas markets means a growing number of manufacturing companies are clearly struggling and fuelling the upward trend in insolvencies.’
He added that the hi-tech and telecoms sectors were also under pressure on their cash management due to the need for funding and debts.
‘In the current climate, firms should remember that cash is king, so cash management is vital, as is taking tough actions to head off problems as soon as possible. Early decisions always give the best prospect of preserving value in a business.’Links
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