UK insolvencies spike as construction firms struggle
The number of UK firms falling into administration jumped last year, driven by companies in the building and construction industry.
In total, 1,403 firms entered administration last year compared to 1,341 in 2018 – a rise of just under five per cent.
Building and construction firms were the hardest hit by challenging trading conditions last year and the number of administrations in the sector jumped from 216 to 254.
Real estate companies were also badly affected, with the number of insolvencies rising to 69, up from 53 in 2018, due to a mix of political uncertainty and the knock on effect of the declining retail sector.
Despite the tough year for the UK high street, the number of retailers entering administration fell in 2019 from 170 to 133. according to the latest research by accountancy firm KPMG. Karen Millen, Jack Wills and Bonmarche were among the fashion brands to collapse last year.
Insolvensies spiked in the third quarter of the year, jumping to 420, including Late Rooms and Eversmart Energy.
In the final quarter, administrations fell back to 311, with Clintons and Toto Energy among the companies that collapsed between October and December.
KPMG head of restructuring Blair Nimmo said: “2019 was a year characterised by profound political and economic uncertainty, with consumer confidence remaining fragile and companies continuing to bear the brunt of rising overheads and increased costs.
“While many businesses battened down the financial hatches, adopting a prudent and cautious strategy, for some, the challenging trading conditions proved to be a bridge too far.”
He added: “It’s certainly no surprise that we have seen an increase in real estate insolvencies over the past 12 months, particularly when you consider two specific drivers of activity.
“Firstly, companies that specialise and support residential property development and investment were significantly affected by persistent geo-political and economic uncertainty.
“And of course, the demise and ongoing restructuring of a large number of high street retailers is having a profound impact on commercial property income and values.”