Figures on company administrations published by the Insolvency Service today provide the latest evidence of returning stability in the UK economy, says KPMG.
The number of companies to enter administration in the second quarter of 2013 was 622; virtually unchanged, fractionally down from the same period last year (625).
The construction sector is experiencing the strongest recovery according to the data, with 51 administrations in Q2 2013, a 43% drop compared to 89 in Q2 2012.
Mark Firmin, KPMG’s UK regions head of restructuring, says:
“This represents the fourth consecutive quarter of recovery in construction; a sector which is a renowned indicator of wider economic health.”
Retail figures also suggest an improvement in trading conditions, with a 9% fall in administrations, from 95 in the second quarter of last year to 86 in 2013. This continues the positive trend for the sector, after last quarter’s 47% fall on the prior year.
However, the picture is still mixed with rising levels of administration appointments in the manufacturing sector (up 4% to 96) and real estate sector (up 9% to 169).
Firmin concludes:
“It’s of some comfort to note that, in the round, the distressed end of the economy is no longer growing year on year, with the total Q2 administration numbers dropping for the fourth year in a row, reaching the lowest number, for this point in the year, since Q2 2009.
“However, it’s a delicate situation given there is slight rise of 12% in total administrations compared to the first quarter of the year and several sectors are still experiencing rising insolvency levels, indicating significant ongoing pressure. The numbers could go either way in the coming quarters – like the UK GDP data, we are seeing fractional improvements that, while moving broadly in the right direction are by no means decisive.”
