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Administrations down by 16%

3 October 2013

This is compared to the 1,464 businesses that fell into administration in the same period last year, and 1,581 in the first nine months of 2011.

The construction industry saw the most positive results, with a drop of 30.5% of administrations. The construction industry saw 241 companies fall into administration in the period, compared with 347 in the first nine months of 2012.

Lee Manning, restructuring partner at Deloitte, said the figures indicate how a “clearing out” of underperformers has given way to “a rebalancing of supply and demand."

“Construction has clearly benefitted from more activity in the housing sector as demand and prices pick up," he said. "Leisure has seen fewer collapses due to a weeding out of the poor performers rather than an increase in discretionary spend for consumers. Overall, London saw the largest number of administrations with 316 appointments, followed by the North West with 272 appointments so far this year.”

Manning points to this week’s Deloitte CFO survey as evidence expansion is now a higher priority for CFOs than cutting costs, “therefore over the longer term, further decreases in insolvency are likely if the outlook for growth in the UK improves," he said. "Indeed, if you take the official figures, administrations have been falling year on year since the end of 2008.”

Hospitality and Leisure, including hotels, restaurants, pubs and leisure providers, recorded a decrease of 24.6%. Administrations in the retail sector dipped by 9.6%, from 157 appointments for the first nine months of 2012, to 142 today.

If you want to find out more about administrations read our detailed guide to administrations

Administrations have fallen in part due to the recovering economy and the fact that struggling companies are doing more informal workouts with creditors and their banks.

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