First drop in number of liquidations in five years

Click to follow
The Independent Online
THE NUMBER of companies going into liquidation in 1993 fell by 7.6 per cent, the first drop in five years, writes John Willcock.

Personal bankruptcies also recorded a drop, down 3.6 per cent, to 30,958.

Tim Hayward, head of corporate recovery at the accountants KPMG, said: 'It seems a downward trend in the level of liquidations has been established, and I am hopeful that this indicates that the economy is maintaining a steady, if slow, recovery.

'I believe that a revival in consumer confidence may be under way although the warnings about increased taxes in April have made some consumers cautious.

'We shall have to wait and see whether, once the pay packets start to arrive in April, an awareness of the actual effect of the higher taxes will result in consumers spending more or less.

'In any event, the failure figures are a lagging indicator of the economy, and despite the fall I expect casualties to remain historically high for the rest of 1994.'

The South-east accounted for 59 per cent of all creditors' voluntary liquidations, a process in which creditors of businesses petition to have it wound up.

There is no prospect under such schemes to save bits of the businesses, and therefore jobs, as there are with other insolvency schemes such as receivership and administration.