‘Cautious optimism’ despite insolvency rate rise
By Kirsty Winter, general manager, Insight Data.
Insight Data’s latest report on May’s insolvency statistics reveals slight increases in some areas compared to April, but these increases are far less severe than those seen at the beginning of the year.
This provides a cautiously optimistic outlook as the UK economy starts to show signs of recovery.
In May, 29 architectural practices registered as insolvent, a 21% increase from April. While this is concerning, it amounts to only five more practices than the previous month. Similarly, the number of installers and fabricators facing insolvency rose by 34%, with 86 cases reported in May compared to 64 in April. This increase, while notable, equates to 22 additional insolvencies and does not indicate a dramatic shift in the sector’s overall stability.
A more striking statistic is observed among main contractors, where insolvencies increased by 200%. This percentage might seem alarming at first glance, but it translates to a rise from just one insolvency in April to three in May. Though a significant percentage increase, the absolute numbers remain low, reflecting a sector that is still managing to weather economic pressures better than earlier in the year.
Small builders, a critical segment of our industry, saw 122 insolvencies in May, marking a 14% increase from April. Although this percentage seems alarming, it represents an increase from just one insolvency in April to three in May. Despite this rise, it is modest compared to earlier months when insolvency rates were much higher. The relative stability seen in May suggests that smaller businesses are managing ongoing economic challenges more effectively.
While any rise in insolvencies is unwelcome, the slower rate of increase in May is significantly less dramatic than those recorded in the first quarter. This trend is encouraging as it indicates that businesses are adapting to the current economic environment and finding ways to navigate through these turbulent times.
Looking ahead, there are reasons to believe that improvement is on the horizon for the industry. As the broader UK economy edges towards recovery, it should provide a more supportive environment for businesses in our sector. Nonetheless, maintaining vigilance and proactive risk management will be essential to sustain this positive trend and build resilience against future economic pressures.
At Insight Data, we are committed to equipping our industry with the insights needed to navigate these challenging times. Our data is designed to empower businesses, helping them make informed decisions and build resilience against economic demands.
To access the full, free report visit our website at www.insightdata.co.uk. Alternatively, call 01934 808 293 or email hello@insightdata.co.uk to learn how our data can help transform your business today.