Corporate insolvencies 'rapidly declining'

New research from PriceWaterhouseCoopers has revealed that corporate insolvencies are on the decline.

The firm found that the number of failed businesses to become insolvent has fallen by 21 per cent in the second quarter of 2010 compared to quarter one.

When compared with the same period last year, insolvencies have dropped by 28 per cent.

“Businesses are starting to look at other options before insolvency is used as a last resort,” said Mike Jervis, partner in business recovery services at PwC.

“Financial restructuring, company voluntary arrangements and schemes of arrangements are now being used,” added Mr Jervis.

Construction and manufacturing both saw a significant drop of 24 per cent and 37 per cent respectively. However, some areas remain heavily affected by insolvencies. Real estate has fared worst, with a 3 per cent increase compared to the last quarter.

Over in Ireland the situation remains bleak, with InsolvencyJournal.ie revealing that the number of corporate insolvencies recorded so far this year has already exceeded the yearly total for 2008, when 733 were noted.

But IBEC economist Fergal O'Brien pointed to a ray of hope within several sectors, highlighting the retail sector as one such bright spot. "Retail is one area where I think we're seeing a turning point,” he said.

“Core retail sales, even when you take out motor sales, have been growing over the past 3/4 months. There was no income tax increase in last year's budget and people are beginning to spend again,” he added.

Share this article

Latest Businesses for Sale

View more businesses for sale