THE UPWARD trend of company insolvencies continued in March, according to the latest figures from the Insolvency Service.

Although company insolvencies in England and Wales in March 2024 were 1,815, 17% lower than in February 2024 (2,177), the numbers remain on an upward trajectory.

Over the year to March 2024, companies entered insolvency at a rate of 55.8 per 10,000 companies. This was an increase from the 53.5 per 10,000 companies that entered insolvency in the 12 months ending 31 March 2023.

Construction Insolvencies

Construction has the highest industry rate of insolvencies in the latest figures.

Construction had 4,403 insolvencies in the year to February 2024 – 18% of all insolvencies during the period.

Warning of the steep rise in the number of businesses categorised as in ‘significant’ financial distress, business recovery and financial advice company, Begbies Traynor reports a leap of 30.8% year-on-year in Q1 2024, with 554,554 companies affected.

Ric Traynor, Executive Chairman of Begbies Traynor, commented: “We are three months into 2024 and the considerable economic challenges facing many companies up and down the UK show no immediate sign of abating. The macroeconomic conditions that made last year so difficult have continued to exert unrelenting pressure on corporate balance sheets.

“Consequently, our own red flag data shows a marked increase in British firms moving towards insolvency compared to the same period last year.

“Growing geopolitical instability is compounding this problem and impairing the UK economy’s ability to pick up some much-needed momentum post-pandemic. The UK economy is in a precarious enough position as it is, and further instability could cause fuel prices to rise markedly, increasing inflation and slowing the appetite for the predicted cuts to interest rates.

No Quick Fix

“Unfortunately, there’s no quick fix for our economy and with inflation falling slower than expected, hope of the Bank of England cutting interest rates significantly in the near future seems to be fading.

“Sadly, the pressing issues facing businesses today will simply push many over the edge and contribute to the current high level of UK corporate insolvencies.”

The insolvency figures for England and Wales were trumped by those in Scotland. In March 2024 there were 115 company insolvencies registered in Scotland, 11% higher than the number in March 2023. In the same period, the rate was 53.1 per 10,000 companies, up by 1.9 from the preceding 12 months ending March 2023.

In Northern Ireland, the picture was much better. The total insolvency rate in the 12 months to March 2024 was 33.9 per 10,000 companies – a decrease of 5.9 from the preceding 12 months to March 2023.

>> Read more about construction insolvencies in the news

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