After an upward blip in Q3 2017 corporate insolvencies have continued on their glide path down in Q4 2017 reaching historic lows as judged by both our National and East Anglian insolvency indexes. Meanwhile our East Anglia businesses in distress index nudged up one point.
The National picture shows that corporate insolvencies dipped by 17.2% between Q3 2017 and Q4 2017 and 11.0% from Q4 2016. In East Anglia the corporate insolvency decline is greater still reducing by 28% and 28% respectively.
Our MWW EA business distress index rose by 0.6% and 7.2% and a comparable National survey of businesses in "significant financial distress" reported increases of 10% and 36% from Q3 to Q4 2017 and Q4 2016 to Q4 2017 respectively.
So why is it that the number of corporate insolvencies are down whilst the number of companies in distress is up? Possible explanations are:
At some point the gap between the index of businesses in distress and the index of corporate insolvencies is going to narrow. Whether that is as a result of a reduction in the number of companies in distress or an increase in corporate insolvencies remains to be seen.
26 March 2018