Insolvency rates in NE lowest for 3 months
NORTH East insolvency rates dropped by 20% last month compared to last year to reach their lowest level for three months.
The number of insolvency-related activities in the North East fell to 76 cases in August compared to the 95 in the same month last year, according to new research from R3, the UK’s insolvency and restructuring trade body.
R3’s analysis of data provided by Creditsafe shows insolvency-related activity – which includes liquidator appointments, administrator appointments and creditors’ meetings – fell to the lowest level since May, when 60 cases were recorded. The fall comes after two consecutive months of rising insolvency-related numbers, with 89 cases recorded in June and 94 in July.
Kelly Jordan, chair of R3 in the North East, said the drop in rates came as more restructuring specialists saw more companies turning to them for advice at the first sign of financial issues, in moves to avoid falling into further difficulties. Ms Jordan said: “The next few months of data will be crucial to understanding whether this trend will continue or if businesses in the North East will require increased insolvency support as the economic pressures persist.”
The North East saw the third largest yearly fall in insolvency-related activity compared to the other UK regions and nations, beaten only by the South East (25.8% fall) and Yorkshire and Humber (21%).
Ms Jordan, a partner at Muckle LLP, added: “Despite the decline in insolvency-related activity, the market is still challenging and many businesses in the North East are still worried about high costs, cash flow issues, and the uncertainty of customer demand.”