There has been a significant drop in the number of Scottish businesses folding over the last quarter
THE NUMBER OF SCOTTISH BUSINESSES facing liquidation has dropped by 23 per cent over the three months leading up to September, according to new figures from KPMG, one of the ‘Big Four’ international auditors.
In the year leading up to September 2017, there were 802 insolvency appointments, a drop from 1040 in the previous year. Between June 2016 and June 2017, there was also a 7 per cent drop in the number of insolvency appointments.
Despite warning that the weakening exchange rate may pose problems for the Scottish economy in the future, KPMG head of restructuring Blair Nimmo attributed the drop in businesses folding to increased stabilisation of the oil and gas sector.
“Scotland’s corporate insolvencies continue to show encouraging signs when compared to the same period last year.” KPMG head of restructuring Blair Nimmo
Responding to the new figures, Nimmo said: “Scotland’s corporate insolvencies continue to show encouraging signs when compared to the same period last year, with a marked fall in failing businesses both during and in the last 12 months.
“The data reflects what we are seeing on the ground, with decreases in the number of liquidation, administration and receivership appointments across most, if not all sectors, compared with last year.
“Following a challenging time for the oil and gas sector, it appears the ship has been steadied. The adoption of new business models and significant cost-cutting measures have left the energy industry in a more comfortable position, and as a result, we have seen fewer insolvencies in that sector.”
“The impact of Brexit remains on the horizon, with no obvious influence yet being felt.” KPMG head of restructuring Blair Nimmo
Nimmo pointed out that the potential impact of Brexit, which could negatively affect the Scottish economy to the tune of £30bn, had not yet been seen. “The impact of Brexit remains on the horizon, with no obvious influence yet being felt,” Nimmo said.
“Looking ahead however, uncertainty in a broader sense may leave a negative impression on consumer and corporate confidence. The weak exchange rate may take its toll on certain sectors, and inflation is at its highest level in five years.”
“In all three quarters of this year, insolvency figures have improved compared with 2016. What will be key to the success of many Scottish firms, however, is how they cope with the coming 12 months and beyond.”
Picture courtesy of Phillipe Put
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