Corporate insolvencies fall
Scottish business failures sharply lower
Figures for the first three months show 21% fewer insolvencies compared to the corresponding period last year. Failures are also down 10% drop on the last three months of 2014.
Administrations, which typically affect larger organisations, saw an incremental rise of 5% (19 to 20) compared to the same period in 2014 but remain far below the average number of businesses going under during the height of the recession.
A quarter on quarter comparison shows a similar increase, with two more businesses going into administration in 2015 than the last three months in 2014.
The data, from KPMG, reveals that liquidations, which tend to affect smaller businesses, decreased by 24% in comparison to 2014’s figures (220 to 168). A decrease of 13% can be seen when the latest figures are compared to the last three months of 2014, suggesting the SME sector is in a healthier economic position as they enter the second quarter of 2015.
Blair Nimmo (pictured), head of restructuring for KPMG in Scotland, said: “It’s clear as we enter the second quarter of 2015, in general, businesses are in a stronger position. Buoyed by an overarching recovery, economically we’re seeing a positive trading environment for both large and smaller organisations in Scotland, which is reflected by the drop in insolvency appointments.
“That being said, volatility in oil prices as well as uncertainties around the outcome of the General Election may have wider repercussions for the economy as businesses adopt a ‘wait and see’ approach to growth.
“Both our Restructuring Advisory and Debt Advisory practices remain busy, however, dealing with issues which remain critical to many businesses including pension deficits, working capital management, cost reduction and refinancing.”