A surprise monthly fall in the number of company insolvencies in England and Wales could indicate that the tide is turning for the local economy, with an increase in business growth and prospects over coming months.
This is according to the Midlands branch of insolvency and restructuring body R3 and follows monthly statistics published this week by the Insolvency Service which show that corporate insolvencies decreased by 6.4% in May 2024 to a total of 2,006 compared to the previous month’s total of 2,144, and by 21.2% against May 2023’s figure of 2,547.
R3 Midlands Chair Stephen Rome, a partner at Penningtons Manches Cooper in the region, said: “Despite the challenges facing local companies, including the uncertain political and economic climate, business owners appear generally more optimistic about the coming months, and many expect output and sales levels to rise and are planning to recruit extra staff.
“With the national economy growing in the first quarter of this year and predicted to grow again in the next quarter, the tide may be about to turn for the better in the East Midlands.
“Businesses do need to remain cautious, however, as inflation levels, depressed consumer spending, and the costs of energy and fuel have been looming over the local economy for months.
“Shorter-term issues, like the rain we experienced in April and May, will also have hit local firms in the construction, retail and hospitality sectors, with delays to building projects and a reduced footfall into shops and hospitality businesses.
“We therefore urge anyone who is worried about their finances to seek advice as soon as possible. We know how challenging it is to talk about money worries but starting that conversation when the problem is new will give more options for resolving it and more time to consider the next step.
“Most R3 members will offer potential clients a free initial consultation so they can learn more about their situation and how it may be resolved.”
