Number of Northern Ireland businesses going bust halves in last decade
THE number of businesses going bust in Northern Ireland has halved in the last decade, official figures show.
There were 73 company insolvencies between October and December, according to the Insolvency Service.
Most (34) were compulsory liquidations while 26 were creditors' voluntary liquidations. There were also eight administrations and five company voluntary arrangements.
That total of 73 was 19.8 per cent lower than the same quarter in 2017, and compares to 155 company collapses at the same period in 2009.
The number of individuals going financially insolvent in Northern Ireland over the same three-month period - some 615 people - was also down year-on-year.
Those figures are made up of bankruptcies (163), which are often seen as a last resort; debt relief orders (140), which are aimed at people with lower debts but no realistic prospect of paying them off; and individual voluntary arrangements (312), where money is shared out between creditors.
Northern Ireland fared better than England and Wales over the period, with the number of people there going financially insolvent jumping to a seven-year high.
Gareth Latimer, a director at Grant Thornton in Belfast, said: “These statistics provide positive reading, because there has been no significant change in the levels of businesses and individuals becoming insolvent since the electorate voted to leave the EU.
“But given the economic uncertainty that still surrounds the Brexit process and the ongoing political impasse at Stormont, it will be interesting to see if these have a greater impact on the level of insolvencies during 2019.”
Stuart Frith, president of insolvency and restructuring trade body R3, said: "As banks and other lenders have tightened their credit standards in response to the Bank of England's concerns around consumer over-indebtedness, many people have run out of road.
"In previous years, the 'helicopter money' provided by PPI refunds, along with generally less stringent lending requirements, helped to paper over the cracks that opened up as a result of a decade of persistently stagnant wage increases, but these avenues look to be closing themselves off.
"People are having to spend more of their income on housing and transportation, leaving less left over for savings and making budgets more vulnerable to shocks."
Mr Frith said of the corporate insolvency figures: "The pressure point for businesses most frequently cited by our members is weak consumer demand.
"People just don't have much spare cash at the moment, reflected in the rise in the number of personal insolvencies also confirmed today."
He continued: "Every business is part of a network and one struggling business will affect others.
"R3 research from the middle of last year found that one in four UK companies had taken a financial hit following the insolvency of a supplier, customer or debtor in the previous six months, illustrating the reach and impact of the 'domino effect'.
"Meanwhile, uncertainty around the shape of the final Brexit deal and future EU-UK trading relationship is already forcing businesses to hold off on investment decisions, again affecting their suppliers and customer networks.
"It has also prompted some companies to stockpile, putting a squeeze on cash flow and reserves."