Manufacturing bankruptcies fall

News Article - 25 October 2010
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According to the Equifax Business Failures Report, 18 per cent fewer manufacturing companies entered administration in the third quarter of 2010 compared to the same period last year.

The new report paints a positive picture of UK manufacturing for 2010, revealing company failures have fallen for each quarter on a year-on-year basis. There's evidence to suggest the recovery is being mirrored across UK businesses as a whole, with a 12.5 per cent fall in administrations from Q2 to Q3.

For Q3 2010, there were a total of 6,646 bankruptcies - a step closer to pre-recession levels of administrations experienced in late 2007 and early 2008. Yet this figure is still significantly higher than during 2004, 2005 and 2006 when the economy was experiencing rapid and sustained growth.

Broken down geographically, the strongest performers for Q3 versus Q2 were the West Midlands (15.7 per cent fall in failures) and London (14.3 per cent). The East of England (13.6 per cent) and Yorkshire and Humberside also experienced positive results.

Wholesale experienced the most positive quarter-on-quarter and year-on-year performance with reductions of 19.4 per cent and 19.7 per cent respectively. The Scottish economy emerged most strongly with a significant 33.1 per cent year-on-year fall.

While the overall picture is a positive one, industry experts are warning firms to remain vigilant. The Government's spending cuts - announced last Wednesday - are expected to dramatically change market conditions, particularly affecting manufacturing companies that have strong ties to the public sector. The planned VAT hike in January is also likely to put pressure on firms to remain competitive by absorbing the cost without passing it onto consumers.

Companies must continue to push forward for growth and a strong market position by protecting profit margins and ensuring internal operations are as efficient as possible.

Access business software can help manufacturing companies find and act upon internal efficiencies. Production control ensures every order is assigned a priority so your best customers are satisfied first, and profitability reports can be run at any time to see where process improvements or pricing negotiations may help protect your margins.

For more information, please call Access on 0845 345 3300.

Article keywords: Equifax Business Failures Report, manufacturing companies, fall in bankruptcies, economic recovery, Government spending cuts, Government Spending Review, VAT rate rise, Access business software, production control software, profitability reports

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