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Business insolvencies remain steady - what does this tell us?

28 Apr 2017

The latest insolvency statistics released today from the Insolvency Service have shown that company insolvencies fell during the first quarter of 2017. But, with unusually high levels in early 2016, these figures have actually revealed a rise in company insolvency for the third quarter in a row.

Company insolvencies in Q1 of 2017 were an estimated 3,967 – of which Creditors Voluntary Liquidations (CVLs) accounted for 68%. However, this figure is a decrease of 29.1% compared to Q4 at the end of last year.  But we must remember  that last year's figures were inflated by the 1,796 personal service companies (PSCs) entering CVL in Q4 2016.

If you discount this 1,796 from the figures, then the underlying figure for company insolvencies was broadly unchanged compared with the previous year.

There are perhaps no particular 'tea leaves' that can be read from these latest figures as to what may be coming, and even if there were, the Brexit 'unknowns' probably render such predictions folly.

There are also other clouds building, such as increasing inflation and high consumer debt which, whilst ostensibly showing as higher personal insolvency figures, will of course impact on the fortunes of companies if their customer base is affected and consumer confidence starts to wobble.

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