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 July 2020:
- A total of 1,548 companies became insolvent in July 2020.
- The total number of insolvencies increased by 43% compared to June 2020.
- The total number of insolvencies fell by -21% against July 2019.
- 16% of insolvencies came from within the professional services sector.
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Insolvencies by month
Total number of insolvencies by month.
The month of July saw a total of 1,548 companies become insolvent, an increase of 43% on last month. July 2020 insolvencies remain -21% lower than July 2019 however the increase compared to last month is a solid indication that insolvency numbers may now continue to rise.
This significant reduction in the overall number of insolvencies year-to-date 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, as government schemes begin to come to an end and cash reserves become scarce many businesses may struggle to stay afloat.
The total number of UK company insolvencies for the year rose to 11,546 by the end of July 2020. This represents a 13% decrease when compared to the same period (January – July) 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 15% of all insolvencies in July, with 175 construction companies becoming insolvent. This is the largest number of insolvencies in the construction sector in the past 3 months. On a year to date basis, it remains the sector with the highest number of insolvencies, with 1,777 companies becoming insolvent, representing 15% 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 187 companies become insolvent in July, bringing the year to date total up to 1,381 while 161 Hospitality businesses failed, bringing the sector’s total to a very similar 1,261 for the year. Taken together these sectors represent 23% of all insolvencies and with both areas particularly vulnerable to government lockdown measures and restrictions we can only expect additional failures as the year continues.
The table below shows the total number of insolvencies from January to July by sector. It also includes the % share of insolvencies for 2020 and % change compared to the same period in 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.