Press Room
Company administrations fall 5% on last quarter and 3% from
last year
The number of troubled companies dropped by 5% last quarter with
974 companies being placed into administration in England and Wales
in the third quarter of 2009 (1027 in Q2 2009), according to
statistics released today by the Government's Insolvency Service.
The latest quarter also represents a drop of 3% on the third
quarter of 2008, when 1007 administrations were recorded.
Meanwhile, company liquidations in England and Wales dropped by 5%
to a total of 4716 in the third quarter of 2009 compared to the
previous quarter, when 4949 liquidations were recorded (Q2 2009).
This does, however, represent a 15% increase on the same period the
previous year, when 4117 liquidations were recorded (Q3
2008).
"There has been a drop in the number of business failures in Q3
compared to the previous quarter and compared to the same period in
2008. While this is good news, the number continues to be near a
historic high and we expect the number of administrations to pick
up in the coming months," commented Malcolm Shierson, Partner at
Grant Thornton's Recovery and Reorganisation practice.
"Despite early signs of optimism in retail, we are still in
recession and corporate insolvencies tend to lag economic
performance. We therefore expect to see a high level of business
failures until 2011," said Grant Thornton's Malcolm Shierson.
"Administrations are a better measure of the health of the economy
than liquidations, because troubled large companies tend to be
placed in administration, whereas liquidations are more common
among smaller enterprises. Since the first quarter of 2008, the
number of British companies going into administrations has been at
historic highs. We only expect the number of firms going into
administrations to reduce significantly when the British economy
has returned to sustained growth," concluded Grant Thornton's
Malcolm Shierson.