The latest insolvency statistics have shown that there has been a 20% increase in the number of voluntary liquidations of companies. The statistics are adjusted so that they do not include liquidations following administrations, as that would involve a certain amount of double counting.
There were 3,824 liquidations in this quarter, compromising 3,083 creditor voluntary liquidations (CVLs, 81% of total insolvent company liquidations) and 741 compulsory liquidations (19% of the total). No new bulk insolvencies were recorded for CVLs in Q3 2018. Excluding bulk insolvencies this is the highest number of company liquidations since Q3 2013 and the highest number of CVLs since Q1 2012. In comparison to Q2 2018 underlying CVLs increased by 11.8% and compulsory liquidations fell by 2.5%
However the actual liquidation rate, i.e the number of companies that have gone into liquidation as a proportion of the total number of companies, has actually gone down, so these figures are not as alarming as perhaps they first appear. In the 12 months ending Q3 2018, 0.45% of active companies (or 1 in 221 of all active companies) went into liquidation, down from 0.49% in the 12 months ending Q2 2018.
With regard to administrations and company voluntary arrangements where the aim is more rescue, there has been an increase in the procedures.
In Q3 2018 there were 390 administrations, 12.9% higher than in Q2 2018 and 25.9% higher than the same period in 2017. Administrations have been fairly flat since Q2 2014, although this quarter saw the highest number of administrations in that period. There were 94 company voluntary arrangements (CVAs) in Q3 2018, the same as the previous quarter but 16.0% higher than Q3 2017.
As is usual construction companies are the most heavily represented in the statistics, with retail and vehicle related companies also featuring highly.
Excluding bulk insolvencies, in the twelve months ending Q3 2018, the highest number of new company insolvencies was in the construction industry with 2,924 insolvencies – up 3.8% from the 12 months ending Q2 2018. The second highest underlying number of new company insolvencies was the wholesale and retail trade; repair of vehicles industrial grouping with 2,270 new company insolvencies in the 12 months ending Q3 2018. This was up 2.4% compared to the 12 months ending Q2 2018.