Company insolvencies in England and Wales have fallen to the lowest number since the end of 2007, according to the Insolvency Service.
The agency’s latest statistics show that 4,052 companies entered into formal insolvency in the first quarter of 2015. This was one per cent less than the last quarter of 2014 and 11 per cent lower than a year ago.
The figures also show that creditors’ voluntary liquidations were at their lowest since June 2008.
Some 2,481 companies entered into a creditor’s voluntary liquidation in the first quarter of 2015, a four per cent drop on the previous quarter and six per cent down on the same period in 2014.
However, a total of 904 companies were subject to a compulsory winding-up order in the first quarter, a nine per cent increase on the previous period but 16 per cent lower than a year ago.
In a similar trend, there were 432 administrations from January to March 2015. This is nine per cent higher than the previous three months but 17 per cent lower than a year ago.
The number of company insolvencies has been falling since the beginning of last year.
Glyn Mummery, partner at FRP Advisory, said: “The annual decline in quarterly administrations is a clear barometer of continuing improvement in overall economic growth, mirroring the sharp year-on-year declines in volumes of administrations seen in the final three months of 2014.
He added: “The latest figures mark more than two years of quarterly declines in administrations, with quarterly volumes for the past four successive quarters now averaging just over 400, down from a recent peak of 779 in the first quarter of 2012.
“The first quarter has shown one of the sharpest annual declines since the advent in 2004 of the new turnaround culture for businesses, when the Enterprise Act 2003 came into force.”
He believes that the quarter on quarter rise in administrations points to parts of the economy failing to enjoy the support services-led economic boom, while some firms struggle with cash-flow as they move from a long stagnation period into growth.
The insolvency figures also show there were 93 company voluntary arrangements and 142 receivership appointments in the first quarter of 2015, the lowest since 2007.
The liquidation rate in the year to March 31 2015 was 0.5 per cent of active companies – the lowest level since the end of 1984.
By Marcel LeGouais