Q3 2015: compulsory liquidations at lowest level since 1989

Written by companyrescuelondonadmin 3 April 2017

Insolvency statistics released today by the government reveal the estimated number of insolvent companies between July and September fell by 10.2% year on year. The number decreased 4.4% since the second quarter of 2015.

Source: https://www.gov.uk/government/statistics/insolvency-statistics-july-to-september-2015 

There were an estimated total of 3,063 liquidations during the third quarter. The number of creditors voluntary liquidations (CVLs) fell by 4.3% since the same period in 2015 (and a 0.7% decrease since the second quarter). As for compulsory liquidations, the number dropped to the lowest level since 1989. This was 29.2% down from the same period last year and a staggering 20.4% drop since the previous quarter.

The estimated total number of administrations decreased 5.5% since Q3 2014 and only 2.4% since the last quarter. Company voluntary arrangements were down 14.6% since the same period last year but increased by 32.1% since Q2. 

Source: Q3 2015 UK gov infographic 

The government’s results for each sector (over the second quarter) show the construction industry faced the highest number of insolvencies, closely followed by the wholesale and retail industry.

Source:  https://www.gov.uk/government/statistics/insolvency-statistics-july-to-september-2015 

Over the last year, the estimated liquidation rate was 0.46% of active companies – the lowest it’s been since 1984. 

As expected, insolvencies continue to decline as the economy goes from strength to strength. More and more businesses are looking to alternative routes for finance and using informal turnaround methods. There are more funding choices available than ever before. Businesses under pressure are perhaps seeking short-term solutions and ‘kicking the can down the road’. Will we eventually see companies run out of places to borrow?

The Insolvency Service has recently made some changes to their methods of researching company insolvencies and statistical information. Estimations are used for the current quarter to assist in providing more accurate information and to avoid missing new insolvencies. Repetitive data will also be prevented using the new system. You can find more information on the revisions here