Number of firms going bust jumps by 10%

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The Independent Online

The number of companies falling into administration jumped by 10 per cent in the first nine months of the year, although the rate of failures in the third quarter has slowed as the economy shows signs of recovery, according to research published yesterday.

Accountancy group Deloitte said that 6 per cent fewer companies went to the wall between June and September, than during the same period last year, but warned that the recovery is not being felt across the board. "In spite of talk of economic recovery, it is evident that the situation is far from rosy," said Lee Manning, a reorganisation services partner at Deloitte.

"These administration figures highlight what businesses are experiencing right here and now. The number of companies falling into administration is still rising: although, if we are to look at our analysis of the first half of the year, which saw administrations increase by 18 per cent, the pace appears to be decelerating as we move further into 2009." In the third quarter of 2008, 707 companies fell into administration, compared with 666 this year.

While the property sector and construction sector has performed relatively well, after a torrid 2008, other industries have seen a worsening picture in 2009. Comparing the first three quarters of 2009 with last year, the recruitment and business services sector has seen administrations increase 11 per cent from 339 in 2008, to 375 in this year. The first nine months of the year saw a total of 2320 companies fall into administration, compared with 2109 companies in 2008.