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Slowdown in rate of firms going bust

September 4, 2009 by admin  
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A recently released report has shown that the rate of firms that are going bust in the UK has been slowing down.

However, despite this news it has also been revealed that the level of company liquidations in the UK is still at a sixteen year high, as the recession continues to take its toll on firms across the nation.

The figures have shown that between April and June of this year company liquidations have remained stable at around 5050 per month.

The rate of growth of company liquidation has slowed down from 57 percent to 37 percent, but the numbers are still at their highest since the second quarter of 1993 according to the reports.

A third of company liquidations across England and Wales have been seen in the property sector, which remains amongst the worst hit sector during the economic crisis. Manufacturing, retail, the motor trade, and construction companies have also been hit hard during the recession.

One economist stated: ‘Rising company liquidations have clearly the consequence of extended, deep recession battering companies’ sales and pricing power, worsened cash flows and an inability of many companies to access credit.. Despite current mounting signs of improvement, economic activity is unlikely to be strong enough for some time to come to stop many more companies from going out of business although hopefully the number failing will moderate. Much will also depend on whether or not businesses are increasingly able to access credit over the coming months.’

Another official said: ‘The second quarter is probably the most stable in the year for company failures, but they may start to pick up again in the third quarter after many businesses suffered during the summer holidays.’

Tags: company liquidations, company, crisis, level, cash, uk, credit, british companies

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