Thursday, 29 October 2021 10:27

Fewer Scottish companies failing

Pamela Muir, head of Restructuring and Insolvency with Morisons LLP

The number of Scottish companies which failed in the third quarter of 2015 fell by 8.6%, according to analysis from corporate lawyers Morisons LLP.

The firm’s latest Accountant in Bankruptcy (AiB) figures show 180 firms failed between July and September, compared to 197 in the previous three months. When compared to the same quarter in 2014, there was a 13.9% reduction.

Pamela Muir, head of Restructuring and Insolvency with Morisons LLP, said: “The fall in Scottish corporate insolvencies in the third quarter of 2015 is welcome and is to be expected given the benign lending environment. Many of the companies which were hovering on the brink of corporate failure have already gone and those which are left have adjusted to the new economic situation.

“However, there should be a note of caution given the continued low interest rates which have contributed to a mood of unreal optimistic expectation. The truth is that interest rates have only one way to go and when they rise they will have an impact and businesses need to be prepared for this change rather than assume the world will continue as it has done since rates were set at 0.5% in March 2009.”

The main areas of concern flagged up by the lawyers were the oil and gas sector, and the related businesses in the north-east. Additionally, those serving the sector including hospitality and property services were also experiencing a “considerable and substantial decline.”

Pamela added: “We may also see some fallout from the recent collapse of the steel industry. The closure of any major employer has a much wider impact on the wider community and economy in which it operates.

“But there are further concerns given the recent CBI report which highlighted the worst export orders for Scottish manufacturers in over two decades. Continued uncertainty in the Eurozone, China’s decline in activity, and a wider marketplace which is still unsure which way the economy is going have all led to a feeling that things may not be getting better but could simply be standing still.”

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