Annual rate of company administrations at record 11 year low at 1,406
FRP Advisory, the restructuring and advisory firm, notes that company administrations are at a record 11 year low, down by 11.4% on 2014 to 1,406. Total corporate insolvencies fell year-on-year by 10.3% to 14,629 the lowest level since 1989 when Mrs Thatcher was in power amid a boom economic growth.
Glyn Mummery, partner at FRP Advisory, the restructuring and advisory firm, said:
“The annual decline in company administrations may have been predicted but this is still sharply down from the 1,587 recorded in 2014. Administrations in England and Wales last year were still 200 lower even than the record low of 1,602 recorded in 2004, the first year of the turnaround culture ushered in by the advent of the Enterprise Act 2003.
The rate of GDP growth may have slowed but the economy is still in pretty good shape. Headwinds are appearing in the economy, with declines in construction activity, manufacturing, mining, and oil and gas support services as well as parts of the food industry, due to competitive pricing and the effects being felt from a slowdown in the Chinese economy.
The spectre of rising interest rates has however been put on the back burner for now which may help any struggling UK industries. Headline figures of UK economic growth remain inflated within the financial sector by the distortive effect of real estate investment and trading in what remains an over-heated South East housing market. The hot housing market has not stimulated large parts of the rest of the underlying real economy on which so many of the country’s jobs rely. Over the past six years the number of company insolvencies has been in overall decline in line with economic recovery. However, FRP Advisory predicts an increase in administrations in 2016 due to weak points in key parts of the economy, particularly in construction, which witnessed a 1.1% fall in output according to official ONS GDP figures released yesterday"