Corporate insolvencies are set to soar dramatically in 2009, reaching 5,000 by the end of the year, according to predictions by market watcher KPMG.
This is in stark contrast to the 3,225 insolvencies reported in 2008 and 2,230 in 2007: a 45 per cent increase in insolvencies between 2007 to 2008, according to KPMG’s figures.
Jim Tucker, insolvency practitioner at KPMG Restructuring, said: “The downturn is now firmly entrenched in the real economy and there are hardly any sectors that have not been hit.
“Confidence is a key driver behind consumers’ and businesses’ willingness to spend money, and right now confidence is at a low ebb. A number of companies and their stakeholders are trying hard to restructure their businesses, but given the speed of the downturn it is inevitable that some will run out of cash.”
Chris Laverty, a partner in KPMG Restructuring’s large-scale insolvency team, said: “Retail insolvency appointments to the end of January 2009 are up 300 per cent compared with the same period in 2008, proving the vastly different trading landscape for retailers.
“With consumer confidence in decline, the soaring cost of imported goods or withdrawal of credit insurance and the overall lack of credit to bridge retailers to the next key trading period of Easter, means we would expect the tally of insolvencies on the high street to continue to climb.”
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