Company liquidations have risen by 14.2 per cent in the UK, according to figures released by the Department of Trade and Industry (DTI).
There were 3,389 liquidations in England and Wales during the third quarter 2005 – an increase of 0.3 per cent on the previous quarter. This comprised 1,531 compulsory liquidations and 1,859 creditors voluntary liquidations.
Receiverships fell by 16.3 per cent during the quarter, but administrations continued to increase with a 47.3 per cent rise on the same period last year. The number of companies entering administration has risen for the eighth successive quarter, the DTI said.
In addition there were 17,562 individual insolvencies during Q3 2005, with bankruptcies rising by 30.9 per cent and Individual Voluntary Arrangements rising by 95 per cent.
Nitin Joshi, director at insolvency firm Vantis, said the DTI results reflected the state of the IT industry.
“We are facing a 10 per cent increase in IT insolvencies this year. This is due to a number of reasons; first, bank legislation means it is cheaper to declare yourself bankrupt. Second, there is always mismanagement and thirdly there is the economic factor – the business is not there.
“The next two years will be difficult for the channel. Borrowing is cheap, but firms still have to find the business while labour costs continue to increase. Add in foreign competition and things are going to be tough.”
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