Nicola Clark, Restructuring & Insolvency Partner at UK top 10 accountancy and advisory firm Azets, comments on the latest company insolvency statistics for December 2023, which reveal total company failures for 2023 exceeded 25,000 for the first since 2009.
“The number of company insolvencies in December 2023 (2,002) fell compared with high levels in the previous month (2,466). This is unsurprising as insolvencies are usually lower in December, however levels remain slightly higher than in the previous year (1,965 in December 2022) and continue to be well above pre-pandemic levels.
“Despite the monthly decrease in corporate failures, in total in 2023, they are at their highest level since the aftermath of the financial crisis in 2009.
“We expect that fallout from the impact of large corporate failures in the construction industry will continue, and early indications are that the Christmas trading period was quieter than hoped, increasing the pressure on leisure and hospitality businesses, where we expect further insolvencies in the coming months.
“Administrations were also reduced in December 2023, but we anticipate that larger companies will seek to restructure and secure the profitable parts of the business going forward.
“Although interest rates appear to have stabilised, property-related businesses are still feeling the pressure and are being forced to make tough decisions. Taking early advice is key to avoiding a terminal process such as liquidation.”