Business suffers effects of war

Business suffers effects of war

Business confidence has taken a battering because of the war, exacerbating the economic downturn, and causing a rise in business failures which have led to insolvency firms recruiting extra staff to cope with the increased workload.

Link: War forces write downs for seismic data industry

The economy, already weakened by the global downturn, suffered a further slowdown in the run-up to the war and put many businesses under pressure. And although most insolvency practitioners say it is too early to see businesses fail directly because of the war, evidence of war-related insolvencies is beginning to trickle in.

The most troubled companies are in the tourist and travel sectors, which have been suffering since September 11, but have seen a further drop in trade due to the war.

‘The travel industry has been suffering as a direct result of the war and the economic uncertainties in the period leading up to the start of the hostilities,’ said Maurice Moses, managing director of Numerica’s business recovery group.

‘Tour operators contract for flights and hotel stock. They are being forced to discount product heavily in order to stimulate demand and attract bookings,’ he added.

Brian Callaghan, head of business recovery at Chantrey Vellacott DFK, said he had seen ‘signs of the downturn kicking in both in terms of the practice and our client base’.

He added the current picture was poles apart from that of the 1990s.

‘What is so different,’ he said, ‘is interest rates are low, so companies don’t have masses to pay on their debts. But the war is doing nothing in terms of confidence in the economy.’

Martin Freeman of Griffins insolvency firm said that, although he had seen no particular increase in distressed companies due to the war, the firm was recruiting extra insolvency staff ‘because we expect there to be a downturn’.

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource