Accountants Manchester will be interested to learn that UHY Hacker Young claims we have seen the worst of the recession and the number of companies going into liquidation is starting to decrease.
In the last fiscal year, the number of corporate liquidations fell by 16% to 20,700, compared to 24,700 in the previous financial year, according to the figures UHY have compiled from Companies House data.
Nick Young, a corporate recovery partner at the Top 20 firm of chartered accountants, said the data shows that the worst of the recession is behind us. Some practitioners have anticipated a deluge of SME liquidations and insolvencies but we certainly do not expect that to happen now.
The situation is not likely to reach catastrophic proportions although we may continue to see high insolvency levels because of the government austerity measures, he continued.
At the height of the last recession in 1991, company collapses rose to a peak of more than 27,000 compared to the peak of 24,700 seen during the latest recession.
When you consider that there are now more double the amount of active companies than there were in 1991, UK companies have fared a lot better during this recession than they did in the last, he concluded.
It remains to be seen whether this prediction will in fact be true. There is still a great deal of economic uncertainty in the UK and there’s a long way to go before confidence levels return to pre-recession levels.