Manufacturing firms beating insolvency rate

News Article - 17 February 2011
Category: Business

New data suggests that manufacturing firms in England are keeping ahead of the insolvency curve, with the manufacturing sector reporting a lower number of insolvencies than the economy as a whole.

Administrations in England fell across the board by 32 per cent in 2010, while the manufacturing sector reported even healthier figures with the number of insolvencies falling by 37 per cent. These figures follow recent research by Baker Tilly that shows a 24 per cent fall year on year for administrations across England, with a significant 37 per cent fall in London and the south-east.

These numbers may be attributed in part to the rising demand for British-made goods in the UK. Reports have also revealed improved demand from native and foreign markets.

Meanwhile, employment levels in the manufacturing sector rose for the tenth successive month due to strengthening market conditions and the launch of new product lines.

Bruce Mackay, partner at Baker Tilly, said: "This has to be good news. It is encouraging news for the supply sectors, despite the fears of the impact of recent adverse weather conditions and fuel price increases affecting trade."

Experts predict that Q2 2011 statistics will display a GDP growth following a 'time-lag' effect. The statistics from Q4 2010 and the predicted figures for Q1 2011 reflect the impact of the record bad weather and the uncertainty in the jobs market at the end of last year.

Geographical insolvency trends suggest a north-south divide with firms in the south of England faring better. Larger companies with more than 500 employees were not quite as resilient, highlighting the continued unpredictability of markets and the need to monitor business performance.

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Article keywords: manufacturing sector, insolvency, Baker Tilly, Bruce Mackay, Access business accounting software, cashflow forecasting module

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