The latest insolvency statistics from R3 – stormy weather on the horizon?
Comments by R3, the voice of the business recovery profession, on the latest insolvency statistics reflect the general mood of gloom which has started to overshadow the business environment. Whilst we are not perhaps at the stage of gathering storm clouds just yet, the latest results suggest things are at least starting to get a bit cloudy. The forecast for the medium and long term is starting to turn a little darker and we may see some turbulent winds blowing through 2019.
Here is what the R3 business weather watch has to forecast:
“After three years of relatively flat numbers, 2018 saw insolvencies creep back up to levels last seen in 2014.
“Meanwhile, uncertainty around the shape of the final Brexit deal and future EU-UK trading relationship is already forcing businesses to hold off on investment decisions, again affecting their suppliers and customer networks.
“Government proposals to give itself priority status for repayments in insolvencies may well have a negative impact on the ability of small businesses to finance themselves this year. With uncertainty in the supply chain, many businesses will be seeking to increase their stock levels to counteract this and will require new finance to do so. But if funders are concerned that the Government will take a bigger cut if things go wrong, then lending decisions become much harder.
“Across 2018, R3’s members across the UK reported that demand for their services – from advice on turnaround and restructuring processes to formal insolvency procedures – increased, and this has carried over into the start of 2019. We would encourage directors of companies which are finding current market conditions tough to seek out knowledgeable and qualified advice from a professional source. The earlier a company seeks advice, the more options it will have.”
It looks like things may get a little stormy in the coming months. If your clients start to feel the effects of the changing environment and need to discuss their own short or long term forecasts, we are always here to help.