Statistics tentatively support indications that the economy could be improving. However, this headline good news is severely tempered by the ongoing poor health of the retail trade sector.
The latest statistics from the Insolvency Service tentatively support indications that the economy could indeed be improving. The 19% drop in administrations in the third quarter of 2012, compared to the same period last year, from 673 to 548, takes the number down to the lowest point since the first quarter of 2005.
However, this headline good news is severely tempered by the ongoing poor health of the retail trade sector. The latest quarterly data shows retail insolvency continuing its upward trend, with the total number of retail administrations this year to date up 38% on the same period last year, which was itself up 10% on the 2010 data.
Mark Firmin, KPMG’s Head of Regional Restructuring, said: “While the welcome drop in insolvency figures supports recent economic data showing that we have technically emerged from recession, the underlying position apparent in the retail sector is very worrying given this is often considered to be a lead indicator of trouble ahead.
“These mixed messages mean the next six months and especially the post Christmas figures for the first quarter of 2013 are going to be crucial in terms of indicating whether or not the rise in insolvencies in the retail sector will have a knock on effect on the rest of the economy.”
With 153 real estate administrations, this sector is still trending at just under a third of all such insolvency appointments, representing the biggest industry share by far, though the figure is a 30% fall compared to a year ago.
- ENDS -
For further information, please contact:
Alison Anderson, PR Manager, KPMG
T: 0113 254 2980
KPMG Press Office: 020 7694 8773
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with nearly 11,000 partners and staff. The UK firm recorded a turnover of £1.6 billion in the year ended September 2010. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 150 countries and have more than 138,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.
KPMG International provides no client services.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.