Company administrations to rise in 2022
The number of company administrations in 2022 is set to rise, but will still be lower than pre-Covid levels.
According to a new analysis from global risk and financial advisory Kroll, approximately 895 companies will enter into administration this year, up from 659 in 2021. However, administrations are still set to be lower than they were before the Covid-19 pandemic. 1,392 companies went into administration in 2019.
Kroll noted that UK businesses have been facing a series of economic headwinds such as rising inflation, supply chain disruption and a lack of access to finance.
During the month of July, 75 businesses entered administration, bringing the total number of administrations this year to 522.
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Businesses in the construction sector have been most affected, with 76 administrations in the year to date. Manufacturing, real estate and the leisure and hospitality sectors have also been highly affected.
“There is a lot of focus on the health of the economy and the impact it will have on consumers and businesses,” said Benjamin Wiles, managing director, restructuring, Kroll.
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“At current rates, we are expecting to see a lower number of company administrations this year. Despite the pressures on companies, there is still a lot of support for business – through Covid loans or rate relief – but also through the support from creditors, notably HMRC, who have given more leeway and support of payment arrangements over the last few years.
“For now, consumer spending remains robust, but there are indications that consumer confidence is lowering, and we may see a reduction in spending in the Autumn, though maybe not as much as we’d expect.”
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