Company insolvencies increased by nearly 20% in the first three months of 2023 compared with the same period last year.
R3, the insolvency and restructuring trade body for Dorset has said that the figure of 5,747 corporate insolvencies in January, February and March were the highest for any first quarter of a year in England and Wales for more than a decade.
It was down slightly on the last quarter of 2022 but R3 has warned this shouldn’t disguise the "real and present danger" facing many businesses this year.
Garry Lee, chair of insolvency and restructuring trade body R3’s Southern and Thames Valley region, including Dorset, said: “The figures for Q1 2023 reveal a bleak start to the year. A small dip in overall corporate insolvency levels compared to the last quarter of 2022 doesn't hide the fact that more directors are choosing to shut up shop and more creditors are choosing to chase unpaid debts than 12 months ago.
Read more: South West insolvency-related activity reaches 11-month high - according to new research by R3
“Economic volatility and the costs crisis remain a clear and present danger for those firms struggling in a challenging trading climate, and unless the economic picture improves, it's unlikely numbers will drop in the near future.”
The corporate insolvency levels for the first quarter of the year were 17.7% higher than in the same period for 2022, at 4,884, and 142.7% higher than 2021's total of 2,368. There were 29,017 adjusted personal insolvencies in the first quarter of 2023, a fall of 1.8% for the fourth quarter of 2022's total of 29,534.
In addition, there were 4,739 Creditors' Voluntary Liquidations in the first quarter of 2023, the highest for more than a dace and 652 compulsory liquidations, 318 administrations and 38 company voluntary arrangements.
Mr Lee, who is an associate director in the recovery and restructuring services department of professional services group Evelyn Partners, added: "Directors in Dorset need to be vigilant and seek advice at the first sign of issues with their business, or the second they start to worry about it or its finances.
“If stock starts to build up, cashflow or bill payments become a concern, or the managers are worried about the business in any shape or form, that’s the time to seek advice from a qualified and regulated source.”
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