Accountant in Bankruptcy (AiB) has released official statistics reporting corporate insolvencies Scotland for the second quarter (July to September 2018) of 2018-19. The number of corporate insolvencies in Scotland fell by 5% in Q2 2018-19 (July-September 2018) compared with Q1 2018-19 (April-June 2018), but rose by 4% compared with Q2 2017-18 (July-September 2017).
Commenting on the Scottish Insolvency Statistics, Tim Cooper, Chair of R3 in Scotland, the insolvency and restructuring trade body said “The quarter-on-quarter fall in the number of corporate insolvencies is the second decrease in a row in the quarterly figures, but it is still too soon to say whether this fall will be sustained in coming months. There were still, however, more corporate insolvencies than in the same quarter last year, which underlines that many parts of the Scottish business community are experiencing difficult trading conditions.”
“The July-September numbers are coming off the back of a relatively strong performance for the Scottish economy in the April-June period, when GDP grew by 0.5%, which will have helped many companies. The construction sector, in particular, will have breathed a sigh of relief as its output grew by 1.8%, rebounding from the poor performance in the first three months of 2018.”
“Consumer sentiment has been in negative territory in Scotland since the second half of 2016, while house price growth has been positive but not outstanding; both of these factors will have constrained consumer spending, which underpins a large portion of overall economic activity, and shows that no company reliant on consumer spending can afford to be complacent.”
“The predicted rises in interest rates will restrict the budgets of homeowners and consumer debtors, with debt servicing costs possibly outstripping further wage growth; businesses will feel the knock-on effects of decreased consumer confidence, and tighter household finances. In precarious times, being prepared for different scenarios is always a smart move, and seeking professional advice from a qualified and regulated source can help companies stay nimble, and geared up for whatever is thrown at them next.”