It can be very handy to know what sectors are the best performing when alligning your business plans for the future. A report published on Friday (22 July) helps those of us in the restructuring and insolvency sector manoeuvre our ambulances outside the right buildings. It says that the retail sector accounted for 10 per cent of Administrations in the first six months of 2022. Of the 620 filings, 62 came from that sector.
Construction and manufacturing jockey for position to fill the top two places, the three sectors accounting for 40 per cent of all Administrations. Neil's mate and namesake, Andy Taylor, partner and head of restructuring at Shakespeare Martineau, said: “Administrations were suppressed during Covid due to the introduction of numerous measures, such as the Coronavirus Business Interruption Loan Scheme, the subsequent Recovery Loan Scheme and a general prohibition on many forms of enforcement." (Such a chip off the old block ...)
Analysing the numbers region-by-region, Greater London led the way with 22 per cent of the filings, followed by the South East (17 per cent) and North West (15 per cent). These are numbers that should be more interesting that they actually are, but which make a news bulletin seem sharper and more relevant (if any of you are considering publishing a competitor the the NTI insolvency news service). More interesting, perhaps, is that while January (55) was the quietest month, Administration numbers leapt to 140 in March – the most recorded for 15 months – before dipping to 120, 93 and 104 in April, May and June respectively. The July number is already looking up.
Andy went on to say that our glorious profession is anticipating that banks will review their portfolios and may be taking a more cautious approach to lending decisions in the short to medium term. Another sign is more enforcement and less flexibility from HMRC, signalling doubt a rocky road ahead; with some commentators predicting a demand-led recession, which looks very different to that experienced as we emerged from Covid.
Businesses are looking at underlying issues that are impediments to their survival. Whilst many are beyond their control, the savvy companies are reviewing every aspect of their P&Ls to find savings and squeeze margins. Many fashion and seasonal manufacturers are delaying ordering Christmas stock in the fear that consumers will be too exhausted and poor to shop. Others are waiting for the scrap in the playground between Liz and Rishi to end, and get an indication of what our immediate future might look like.
