A back-to-back fall in the number of monthly company insolvencies in England and Wales is far more likely to be due to a seasonal lull than a significant improvement in trading conditions.
This is according to the Midlands branch of insolvency and restructuring body R3 and follows latest monthly statistics published by the Insolvency Service which show that corporate insolvencies decreased by 8.9% in August to a total of 1,953 compared to July’s total of 2,144.
Corporate insolvencies also fell in July – by 7.3% – but the drop followed a rise in June, when numbers increased by 15.7% compared to the previous month, and a 17.1% rise against June 2023.
R3 Midlands Chair Stephen Rome, a partner at Penningtons Manches Cooper in the region, said: “The fall in corporate insolvency figures is likely to be a result of the traditional slowdown in appointments we see during the late summer and shouldn’t distract from the fact that businesses are still struggling and trying to manage high levels of debt at a time when trading remains difficult.
“While the overall economic picture is gradually starting to improve, the market remains a challenging one, and managing costs is still very much a key concern for many directors.
“From a sectoral perspective, retail sales increased over the summer, and construction output increased in July, but it remains to be seen whether this is enough to compensate for months of challenging trading conditions and whether the critical pre-Christmas trading period can provide the boost businesses badly need.
“We therefore urge consumers and directors to remain vigilant about their finances and seek advice as soon as they spot any signs of distress. Most R3 members will give prospective clients a free consultation to learn more about their circumstances – and taking up that option when worries are at an early stage will provide more potential solutions than waiting until the problems become more severe.”
