Scottish business failures rise in 2016
Reading time: 3 minutes
The number of businesses failing in Scotland rose by 7 per cent last year compared to 2015 (969 up from 904), according to new statistics from professional services firm KPMG.
However, the final three months of 2016 saw a 26 per cent decrease in insolvency appointments compared to the same period in 2015 (206 down from 277).
When the same comparison is made with the previous three months in 2016 (July – Sept), a 27 per cent decrease can be seen (206 down from 282).
Administrations, which typically affect larger organisations, decreased by 3 per cent (99 down from 102) year-on-year.
A quarterly comparison shows from October to December 2016, the number of administrations decreased by 28 per cent compared to the same period in 2015 (26 down from 36). Against figures for July – September 2016, there was a 4 per cent increase in businesses failing (27 up from 26).
12 months to 31st December 2016
Insolvency Appts
Liquidations, which tend to affect smaller businesses, rose by 8 per cent in 2016 compared to 2015 (870 up from 802). From October to December 2016, liquidations fell by 25% compared to the same period in 2015 (180 down from 241.) Against figures for the prior three months (July to September) 2016, there was a 29% decrease in businesses failing (180 down from 255).
Quarterly comparison
Appts
Insolvency Appts
Blair Nimmo, head of restructuring for KPMG in the UK, said: “2016 saw a seven percent increase in the number of corporate insolvencies which, in general, is a negative sign for businesses and the Scottish economy. That being said, the fourth quarter of the year showed a significant reduction from that recorded during the same period the previous year.
“In broad terms, the overall number of insolvencies levelled out in 2015 and is significantly below that experienced in 2010-2012.
“Notably, an expected hike in oil and gas related insolvencies due to the low oil price has simply not materialised, and while significant challenges remain in that sector during 2017, there is no doubt the outlook is now a little more positive than was the case this time last year.
“Interestingly, we have not yet seen the immediate impact of Brexit or Donald Trump’s presidency, and indeed for the most part, the doom and gloom predictions prior to both votes have not materialised. A reduction in the value of the Pound against the Euro and the US Dollar will undoubtedly impact those businesses who purchase raw materials, goods or services in these currencies for sale in the UK, as it may prove difficult to pass on price increases.
“For the most part, economic predictions during 2016 were way off the mark. While there are many positive signs for 2017 including GDP growth, low unemployment and interest rates, we sense a degree of uncertainty. On Brexit, we sense businesses will continue to adopt a cautious approach until matters become clearer after the triggering of Article 50 in March.”
Share this article:
Subscribe to our newsletter to not miss articles like this one:
SUBSCRIBE
