East Anglia sees fall in company failures
STUDY: Business insolvencies still 47% higher than 12 months ago
Company failures in East Anglia fell slightly in the first quarter of 2011, but are still one and a half times the number of a year ago, according to a study. Two quarters of rapidly risiing numbers were followed by an 11% drop on the last quarter. But the number of East Anglian companies entering insolvencing was still 47% higher than 12 months ago. This compares with a national picture of a quarterly increase of 9% and a fall of 5% year-on-year.
In Suffollk and north Essex there were 34 company failures in the first quarter of 2011, compared to 37 in the last quarter of 2010, an 8% drop, said business rescue and insolvency firm McTear Williams & Wood. The picture across the region is broadly the same with the exception of Cambridgeshire which saw a quarterly increase of 5%. The biggest quarterly reduction of 22% in Norfolk is probably more a reflection of the unusually high increase last quarter when the numbers rose by 71%, said the insolvency firm. However, all of the East Anglian counties are still showing significantly higher numbers of corporate insolvencies than 12 months ago in marked contrast to the national statistics, it said.
"As we predicted in our last quarterly update the number of corporate insolvencies nationally has moved higher: The Bank of England's recent cut in its growth forecast tends to suggest that an upward trend is probably set in," it added.
"We also suggested that corporate insolvencies in East Anglia has reached a turning point in September 2010 following five successive quarters of improvement and the number of corporate insolvencies were set on an upward path.
"We still think this will broadly hold true and that the 11% fall in corporate insolvencies last quarter is more a reflection on the relatively high increase posted last time and the current choppy economic environment which lacks clear direction."
As a profession insolvency practitioners continue to be bemused by the low numbers of corporate failures, added the firm. Some commentators have put this down to a supportive attitude from major creditors such as banks and HMRC, but the firm said there was "continuing evidence" of a tougher stance being taken by HMRC on time to pay agreements.
