In its forward-looking insolvency index, BDO Stoy Hayward predicts 419 companies will go bust each week over the next three years.
The firm’s industry watch also revealed business failures rose by 6% last year with 19,928 companies folding in 2002 – 383 every week. Less than 14% of these involved a rescue plan.
The economy’s most vulnerable sector in the study was wholesale, with failures rising by 47% in the fourth quarter of 2002 compared to the same period last year. The travel and transport sector followed, as BDO predicted a 35% increase in businesses going to the wall.
The short term business failures would come as a result of a slowdown in consumer spending and a decrease in GDP growth, according to BDO.
BDO partner Shay Bannon, business recovery services, said: ‘This quarter, we are seeing the true impact of the consumer spending slowdown on UK companies.
‘With hundreds of firms set to collapse, business managers and owners must avoid burying their heads in the sand, and wise up to the early warning signals that indicate problems.’
Steve Absolom and Will Wright from KPMG Restructuring have been appointed joint administrators to City Motor Holdings and associated companies
Partners from Johnston Carmichael have been appointed as joint administrators to Axon Well Interventions Products UK
Begbies Traynor have been appointed administrators of William Anelay Ltd, York, one of Britain’s longest-established construction and heritage restoration companies
Smith & Williamson has been appointed administrators of charity 4Children