Businesses ‘are showing signs of distress’

Posted 18/02/2011

A growing number of companies in the UK are affected by insolvency and redundancy, new statistics have suggested.

According to the second quarterly Business Distress Index carried out by insolvency trade body R3, 54 per cent of the respondent firms recorded decreased profits in December 2010, up five per cent from September.

Furthermore, the number of enterprises making redundancies rose four per cent, while one in six now find it difficult to pay invoices on time.

In September 2010, R3 noted corporate insolvency numbers are expected to rise to 27,500 in 2011 – compared to 26,400 in 2009 – despite optimism from UK business owners.

Commenting on the figures, president of the organisation Steven Law said: “The overall picture indicates that conditions have got more challenging from September to December last year.”

Particularly worrying, he went on to add, is how many firms are struggling to pay their bills, “as this is the technical definition of insolvency”.