Summary
Here you will find all the latest details on company insolvencies across the UK and including Northern Ireland. This page is updated on a monthly basis and provides details on company insolvencies by month and sector since 2018. For real-time insight and alerts about company insolvencies please consider subscribing to the Creditsafe platform.
Key findings for May 2020:
- A total of 1,155 companies became insolvent – the lowest monthly figure in three years.
- The total number of insolvencies fell by 19% compared to April 2020.
- The total number of insolvencies fell by 37% against May last year.
- 16% of insolvencies came from within the Construction sector.
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Insolvencies by month
Total number of insolvencies by month.
The month of May saw a total of 1,155 companies become insolvent, the lowest monthly figure in the last three years. This number shows a 19% decrease compared to April and a 37% decrease compared to May 2019.
This significant reduction in the overall number of insolvencies undoubtedly reflects the particular circumstances resulting from the Covid-19 pandemic, and resulting lockdown. Many distressed businesses are managing to keep afloat by making use of the high level of government support available, and many may well have opted to file for an extension with Companies House. However, we have also seen that the number of court cases has been drastically reduced, with non-essential court hearings being postponed until later this year.
The total number of UK company insolvencies for the year rose to 8,919 by the end of May 2020. This represents a 4.63% decrease when compared to the same period (January – May) in 2019. Given that the trend for the period of January to March saw an increase of 13% we can expect the numbers to rise again once the economy restarts. Businesses may well not recover from the current slowdown and the administrative backlog in the courts and public administration will work through with a resulting rise in insolvencies.
Insolvencies by sector
Total number of insolvencies by sector.
Construction remains the most significant contributor to the insolvency numbers representing 16% of all insolvencies in May, however, in line with the overall trend just 181 construction companies became insolvent, the lowest monthly figure in the three years we are reviewing. On a year to date basis, it remains the sector with the highest numbers with 1,453 insolvencies representing 16% of the total.
Two sectors that traditionally see large numbers of failures are also worth examining and worth keeping under review. Wholesale & Retail saw an additional 154 companies become insolvent in May, bringing the year to date total up to 1,084 while 87 Hospitality businesses failed, bringing the sector’s total to a very similar 1,012 for the year. Taken together these sectors represent 24% of all insolvencies and with both areas particularly vulnerable to government lockdown measures and with Hospitality, in particular, looking at a potentially extended period of closure we can only expect additional failures as the year continues.
The table below shows the total number of insolvencies from January to May by sector. It also includes the % share of insolvencies for 2020 and % change compared to 2019.
Want to explore the data for yourself?
Whether you want to understand the impact of Insolvencies across a group of sectors or the likelihood of an individual company becoming insolvent, you can find all of this data and more within the Creditsafe platform.
Methodology
Creditsafe uses the following statuses to determine if a company has become insolvent:
- In Liquidation.
- Administrator Appointed.
- Appointment of Liquidator.
- Meeting of Creditors.
- In Administration.
- In Receivership.
- Administrative Receiver Appointed.
- Administration Order.
- Company is wound-up.
Understanding the Standard Industry Classification (SIC) list:
We use 2 digit Standard Industry Classification (SIC) codes to create our list of 21 key sectors. These sectors are made up of over 700 individual industry codes.
Companies are required to file their primary business activity at companies house and we use this data to define the business type. Download a list of all 700 SIC codes and descriptions here.