Business News 2009 Business
Administrations up 20%, with Recruitment Sector Worst Hit
Administrations up 20%, with Recruitment Sector
(28 January 2009)
the business advisory firm, has today announced
its analysis of administration figures for 2008.
The results highlight a 20% increase in administrations
in 2008 compared with 2007, and a quarterly increase
of 30% in Q4 compared with on Q3 2008. Lee Manning,
reorganisation services partner at Deloitte commented:
Given the current environment, these figures
do not seem altogether too bad, but they do not
reflect what is truly happening in the economy.
Most of the increase in administration activity
only gathered pace towards the end of last year,
and with many economic commentators speculating
that we are only at the tip of this crisis, we
can expect these figures to increase drastically."
"Businesses should take
this as a warning to act as early as possible
to avoid becoming yet another statistic. This
may require difficult decisions to be made over
staffing and other overheads, and a curtailment
of all non-essential expenditure. Things are going
to become worse before they get better and this
makes proper contingency planning vital.
The property and construction
sector continues to be hit hard, with administrations
up 73% compared to 2007. The continual decline
in house prices, land stock value and the diminishing
numbers of mortgage approvals is exacerbating
Elsewhere, the recruitment
sector bore the brunt: administrations were up
an astounding 232% compared to 2007, and up 208%
on 2006. With the crisis no longer confined to
the financial sector, individuals are feeling
the effects of the credit crunch on a more personal
level. Unsurprisingly, they dont want to
rock the boat and are preferring to stay with
their existing employers rather than look elsewhere.
This is coupled with a wholesale cutback on recruitment
the leisure and hospitality sector only saw a
rise of 16% in the number of companies falling
into administration compared to 2007, and similarly
retail saw an increase of just 6% compared with
2007. We have already begun to see signs of this
changing, and as discretionary spending begins
to be hit we expect to see these figures increase
in the coming months.