Company collapses ease but more manufacturers fail

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The Independent Online
COMPANY failures in England and Wales fell by 9 per cent in the second quarter of 1993 compared with the first three months, but the number of manufacturing companies collapsing is still rising, according to figures from the Department of Trade and Industry.

The number of company insolvencies for the second quarter of 1993 was 5,195, down 12 per cent on the same period last year. But the figure for manufacturing companies rose from 1,269 in the second quarter of 1992 to 1,449 in the first three months of 1993.

Richard Brown, deputy director- general of the British Chambers of Commerce (BCC), which published the figures on behalf of the DTI, said there was a mixed message.

'This third consecutive quarterly fall in the number of corporate insolvencies provides further evidence that recovery is under way. It will help confidence, staunch the decline in capacity and relieve the burden of bad debt on business.'

On the other hand, he said: 'There has to be concern over the persistent shrinkage of the UK's manufacturing base. It takes years to build up a manufacturing company, but only weeks to shut it down.'

A spokesman for the Confederation of British Industry said that the figures 'provide further indications that the recovery is continuing'. He said manufacturing companies usually lagged behind others in previous recoveries, but they might be restrained currently by the need to raise new finance.

Personal bankruptcies fell by 15.3 per cent to 8,663 in the second quarter of 1993 compared with the previous three months, and were down 1.9 per cent on the same period a year ago.