In June, the number of monthly company insolvencies in England and Wales experienced a significant increase following a surprising decline in May. However, new government data suggests that there may be a silver lining for struggling Midlands businesses, with a growing number showing potential for rescue rather than closure.
According to the latest statistics from the Insolvency Service, corporate insolvencies saw a 15.7% rise in June 2024 compared to the previous month, totaling 2,361. This marks a 17.1% increase from June 2023 and a staggering 49.5% increase from June 2022. Despite these concerning figures, there are positive indications for local businesses.
R3 Midlands Chair Stephen Rome of Penningtons Manches Cooper noted that while Creditors’ Voluntary Liquidations have driven the rise in insolvencies, Company Voluntary Arrangements and Administrations have seen an increase as well. This suggests a growing number of businesses are exploring rescue options with the support of creditors.
Despite recent economic growth and falling inflation rates, businesses continue to face challenges such as high costs and cautious consumer spending. Sectors like retail and restaurants are still struggling, making it crucial for businesses to adapt to changing market conditions.
On a positive note, the construction sector experienced growth in May, indicating potential for recovery after a slow start to 2024. The sector may benefit from government pledges to invest in infrastructure and housing, stimulating growth in key markets.
While many businesses remain optimistic about the future, uncertainties stemming from the General Election and ongoing challenges like customer demand and regulatory compliance are still prevalent. It will be essential for businesses to stay agile and proactive in navigating the evolving economic landscape.
