Company insolvencies in the first half of 2024 were at levels last seen during the 2008-09 recession. June 2024 saw the highest number of company insolvencies since May 2023 with 2,361 company insolvencies, the third highest in the monthly series since 2000.  

Creditors’ Voluntary Liquidations (CVL’s) still featured as the highest form of company insolvency at 79% in June 2024, 16% higher than in June 2023. This was followed by compulsory liquidations at 10% which was 19% higher than June 2023. Administrations stood at 6%, an increase of 22% since June 2023 and less than 1% were Company Voluntary Arrangements (CVA’s) an increase of a huge 64% compared to June 2023. 

We have seen an increase in CVL’s which is a process usually reserved for small businesses. Many smaller businesses will be impacted by cashflow issues due to invoices being paid late and difficulties to access suitable finance. The high interest rates we have seen will have compounded this situation.  

The three industry sectors most affected in June 2024 were: 

• Construction (4,287 insolvencies)  
• Wholesale and Retail Trade and Repair Vehicles (3,811 insolvencies)
• Accommodation and Food Services Activities (3,752 insolvencies)

With high costs and tighter consumer spending, things are still tough for these sectors. Retail and restaurant spending is still down as people are spending less of their discretionary funds. The General election will also have brought some uncertainty but the new Government’s pledge to spend more on housebuilding and wider infrastructure projects should help the sector to recover. 

Xeinadin has reviewed the official statistics and Charles Brook, Director said…

“Obstinate inflation, sustained higher rates of interest, wage pressure, and poor weather have continued to play a significant part in the first half of the year and this hasn’t been helped by political uncertainty on both sides of the Atlantic which is affecting business confidence. Many smaller businesses remain financially squeezed and the service sector including hospitality isn’t thriving at a time when it ought to be on the rise. There may have been an element of ‘spring-cleaning’ involved in some of the insolvencies arising ahead of the anticipated change of Government, and I feel it may depend significantly upon the attitude of HMRC towards existing debt under new Ministerial control, as to whether the upward trend continues. I feel that is reasonable to anticipate relatively high levels of business failure across the three key sectors most affected so far until any of the successful aspects of the new Government’s “Growth” policies start to have an impact in the coming months. I think there’s likely to be more turbulence yet, at least until inflation and interest rates fall further and stabilise.”