Insolvency rise to continue until 2002
The number of companies going out of business is likely to continue rising into the new year even if the UK escapes the economic slowdown blighting the US and parts of Europe, according to Dun & Bradstreet.
Two weeks ago the DTI said corporate insolvencies in the second quarter were up almost 10% on a year ago. Last month Dun & Bradstreet reported a rise in the number of businesses going bust of more than 15% between the first and second quarters of 2001.
Speaking to Accountancy Age this week, Philip Mellor, senior analyst at D&B, said the trend was unlikely to be reversed in the short-term.
‘I would see it continuing for the next couple of quarters,’ he said, pointing to the fact that the number of companies going to the wall had been in decline for several quarters until the beginning of this year.
He added: ‘Regardless of what is going on with the economy in terms of a slowdown, I was expecting the failure rate to rise.’
Two of the world’s largest economies, the US and Germany, are experiencing sharp slowdowns while the UK manufacturing industry is technically in recession. But Maurice Fitzpatrick, Tenon’s head of economics, warned against too much talk of slowdown. ‘At the moment the economy is still growing,’ he said. ‘There is a danger of talking ourselves into recession.’
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Jump in company insolvency figures