Analysis: Administrations set to rise in 2022

New analysis from global risk and financial consultancy firm Kroll has revealed that UK company administrations are set to rise in 2022 compared to 2021, but are still set to remain below pre-pandemic levels.

So far this year, administrations have been 36 per cent higher than in 2021, with 522 administrations so far at an average of 75 per month. Kroll has predicted that the UK could see up to 895 company administrations this year, compared to 659 in 2021.

Despite the rate of administrations increasing, the figure for 2022 is still on course to be below 2019, which saw 1,392. 2019 was the last year unaffected by COVID-19, with government support measures during the pandemic leading to a drastic fall in company administrations.

Administrations so far this year peaked at 96 in March, falling to 75 in July. The most heavily impacted industry has been construction, with 76 company administrations, followed by manufacturing (72) and real estate (60). Leisure and hospitality businesses have also been among those most affected.

Kroll highlighted the array of challenges that businesses are facing in the current climate, including soaring inflation, widespread supply chain disruption and a lack of financing. The consultancy also warned that, despite spending currently remaining robust, there are signs that consumer confidence is beginning to fall amid the escalating cost-of-living crisis.

Commenting on the findings, Kroll Managing Director, Restructuring Benjamin Wiles said: “There is a lot of focus on the health of the economy and the impact it will have on consumers and businesses.”

“At current rates, we are expecting to see a lower number of company administrations this year. Despite the pressures on companies, there is still a lot of support for business – through COVID loans or rate relief – but also through the support from creditors, notably HMRC, who have given more leeway and support of payment arrangements over the last few years.”

The Bank of England has warned that the UK is poised to enter a recession towards the end of this year that could last until the end of 2023. Regarding the health of the UK economy, Wiles said: “For now, consumer spending remains robust, but there are indications that consumer confidence is lowering, and we may see a reduction in spending in the Autumn, though maybe not as much as we’d expect.”


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View recent UK administrations.

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