Company insolvencies exceeded 25,000 in 2023

Corporate insolvencies exceeded 25,000 for the first time since the 2009 financial crisis in 2023, new December insolvency statistics have shown.

Figures also showed that December, typically a quieter month for company insolvencies saw more than 2,000 firms close their doors, surpassing the number seen in the same month the previous year.

Margaret Carter (pictured), Restructuring & Insolvency Partner at Azets, commented:

“The number of company insolvencies in December 2023 (2,002) fell compared with high levels in the previous month (2,466). This is unsurprising as insolvencies are usually lower in December, however levels remain slightly higher than in the previous year (1,965 in December 2022) and continue to be well above pre-pandemic levels.

“Despite the monthly decrease in corporate failures, in total in 2023, they are at their highest level since the aftermath of the financial crisis in 2009.“

Carter warns that larger business failures in some sectors could see fallout spread to others in their industries. January has also already seen a number of high profile closures in the hospitality sector, with many in the industry warning this trend will continue without further support. She continued:

“We expect that fallout from the impact of large corporate failures in the construction industry will continue, and early indications are that the Christmas trading period was quieter than hoped, increasing the pressure on leisure and hospitality businesses, where we expect further insolvencies in the coming months.

“Administrations were also reduced in December 2023, but we anticipate that larger companies will seek to restructure and secure the profitable parts of the business going forward.

“Although interest rates appear to have stabilised, property-related businesses are still feeling the pressure and are being forced to make tough decisions. Taking early advice is key to avoiding a terminal process such as liquidation.”