Number of UK companies in administration doubles in Q4

Further evidence of the growing impact of the economic downturn on businesses was provided today by new figures published by the Insolvency Service, which reveals that the number of administrations in Q4 2008 across England and Wales doubled in comparison with the preceding quarter.

The data, which was analysed by Freshfields Bruckhaus Deringer's restructuring and insolvency practice, shows a total of 2,018 administrations in the final three months of 2008, against 1,007 in the period July-September. More significantly, this represents a 251% rise compared to the 575 recorded in Q4 2007, while over the year as a whole administrations rose by 92%.

Most administrations in Q4 2008 have been seen in the real estate space, which witnessed an increase of 237% quarter-on-quarter. Taking out the failure of 729 services companies that Freshfields sees as an anomaly, the rise would be 23%. Other sectors affected are: financial intermediation services, which rose by 193%; wholesale and retail, which rose 77%; construction, which doubled; and manufacturing which jumped 23%. Only transportation, storage and communications saw a small fall, from 65 to 54.

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