NEW analysis from the Accountant in Bankruptcy (AiB) shows the number of Scottish companies entering insolvency increased during Q3 2022 – with fears of more to follow.
The Scottish figures reflect the UK market generally, with 265 UK companies going into administration between July and September, up from 176 during the same period in 2021. Although these figures show increases, they are yet to hit the pre-pandemic levels of 401 administrations in the third quarter of 2019.
Steven Jansch, head of business restructuring and support at law firm Gilson Gray, said the numbers are not surprising considering the end of a lot of Covid-19 support measures, turmoil in financial markets, increase in interest rates, and rising costs.
“The pressures businesses are facing are also not restricted to any one sector, with retail, food and drink, construction, and manufacturing all seeing casualties,” he added. “We only see this trend continuing into next year.
“The significant increases in interest rates is having and will continue to cause significant problems for companies with high levels of debt, as will labour shortages, increased labour costs, and soaring expenditure on costs like energy bills. Businesses with any form of intentional trade are also suffering from a weak sterling and consumers continue to try to tighten purse strings to cope with higher mortgage payments and their own huge energy bill increases.”
