Insolvency activity up by 8% in North West as firms bank on Xmas trade
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Insolvency-related activity in the North West rose by 8% in October compared to the previous month, according to research by R3, the UK's insolvency and restructuring trade body.
R3's analysis of data provided by Creditsafe shows there were 391 insolvency-related activities in the region during October, which was also 3% higher than the same month last year. However the figure remained below the peaks seen earlier this year in August (409) and March (476).
Fran Henshaw, North West chair of R3 and Head of Corporate Recovery and Insolvency at Beever and Struthers, said: “These figures reflect the continued pressure facing businesses, with inflation and the rise in interest rates pushing up costs, and consumers cutting back on spending due to the cost of living crisis. They come in the run-up to the Christmas trading period, which is a make or break time for many businesses.
“The retail and hospitality sectors in particular have seen some of the highest numbers of insolvencies in recent months. These firms often rely on income during the final quarter of the year to boost their income and break even, so the festive period could determine the fate of many.”
The figures include all insolvency-related activity including insolvency procedures and processes such as administrations, liquidations, receiverships, companies in receivership or wound up, and creditors’ meetings.
One positive trend revealed in the figures is that start-ups in the North West have been running significantly ahead of last year in each of the past four months. There were 7,029 new businesses created in October, up 12% on October 2022 and the second highest figure all year after March, when there were 7,390 start-ups.
They also show that late payment problems have continued to ease for the fourth month in a row. North West businesses had 545,242 overdue invoices on their books in October, down by almost 2% since July. Meanwhile the number of companies who themselves were behind with their bills remained relatively stable over the same period and now stands at 53,733.
Fran Henshaw added: “One of the key trends in recent years is the increased number of directors choosing to give up and close their companies voluntarily. Therefore it is good to see a healthy rate of new business creation, and also that late payment problems appear to have stabilised for now. Anyone worried about their business finances should seek independent advice as soon possible.”