Recession, what recession? – Company Insolvencies Decrease

The latest figures released today by the Insolvency Service show that there were 3,135 company liquidations in England and Wales during the last quarter of 2007, down 2.1% on the same period a year ago.

Compulsory liquidations also fell compared to the corresponding quarter in 2006 (down 17.0%) whereas voluntary company liquidations increased by 9.5%.

Taken together these data would seem to suggest that companies are in good health, with fewer facing imminent closure than one might have expected as business begins to feel the bite of the credit crunch.

But Clive Lewis of the Institute of Chartered Accounts of England & Wales, commenting on the figures, warned against complacency:

Following the announcement of a small decrease in company liquidations in 2007 we believe that there is likely to be a significant increase in 2008.  It often takes sometime for the figures to reflect the reality of the situation and with the credit crunch still taking affect, the housing market slowing and consumer confidence low we think that there will be  an  increase for the whole of 2008.