The number of businesses going into administration in the south west surged by 95% last year, according to business advisory firm Deloitte.
New Deloitte research has revealed there were 215 appointments in the region in 2008, compared with 110 in 2007 and 141 in 2006. Last year’s increase was the second highest of any UK region, with only the north east (98%) seeing more administrations.
The figures show that more than 3,000 firms went into administration across the UK in 2008, a 20% increase, although Scotland and East Anglia actually saw percentage falls last year.
Richard Hawes, reorganisation services partner at Deloitte in Bristol, commented: “Most of the increase in administration activity only gathered pace towards the end of last year, and with many economic commentators speculating that we are only at the tip of this crisis, we can expect these figures to increase drastically.”
Not surprisingly, perhaps, the construction and property industry continues to be hard hit across the UK, with administrations up 73% compared to 2007. Hawes said the continual decline in house prices, land stock value and the diminishing numbers of mortgage approvals is exacerbating the situation.
And he added: “Elsewhere, the recruitment sector bore the brunt: nationally, administrations were up an astounding 232% compared to 2007, and up 208% on 2006.
“With the crisis no longer confined to the financial sector, individuals are feeling the effects of the credit crunch on a more personal level. Unsurprisingly, they don’t want to rock the boat and are staying with their existing employers rather than look elsewhere. This is coupled with a wholesale cutback on recruitment by companies.
“Interestingly, however, the leisure and hospitality sector only saw a rise of 16% in the number of companies falling into administration compared to 2007, and similarly retail saw an increase of just 6% compared with 2007. We have already begun to see signs of this changing, and as discretionary spending begins to be hit we expect to see these figures increase in the coming months.”