The Insolvency Service has released its Q1 figures to reveal how many companies ran into financial trouble in the first three months of the year.
The organisation’s statistics revealed that there was a 53.1 per cent increase in the number of compulsory liquidations in England and Wales during this period compared to the previous quarter. This equates to a total of 1,072 compulsory liquidations between January and March 2014, up from 700 at the end of 2013 and 10.2 per cent higher than the equivalent quarter of last year.
The Insolvency Service, which operates under a statutory framework for dealing with financial failures, also showed that total corporate liquidations rose by 4.9 per cent year-on-year. Meanwhile, Creditor’s Voluntary Liquidations increased by 2.1 per cent in Q1 of 2014 compared to 12 months earlier.
The heavy number of liquidations at the start of the calendar year could be attributed to failures over the Christmas period; as many companies rely heavily on this time to bring in a large proportion of their annual income, should they fail to meet targets over the festive period then they could fall into financial disarray in the months following.
Indeed, the retail sector was the second most prevalent when it came to liquidations, beaten only by the construction industry.
Importantly, however, despite all the above figures seemingly being on the up, the percentage of active companies going into insolvency was down; it dropped from one in 165 in 2013 to one in 167 this year.
Reflecting on the statistics, Giles Frampton, the new president of insolvency trade body R3, said: “Having fallen from their peak during the recession, corporate insolvency numbers have been relatively stable for a while, although they haven’t fallen as far or as fast as they ordinarily do after a peak.
“Economic recovery is very welcome, but extra activity does put added pressure on businesses that might not have the resources or ability to adapt quickly enough. This might have helped push numbers up from last year.” 
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