Government needs to focus on restoring consumer confidence or more high street shops and leisure businesses could go bust in the New Year, according to a Sheffield insolvency expert.
Business finance specialist Phil Meekin from Wilson Field says the lack of consumer confidence is probably to blame for the continuing increase in corporate liquidations.
“A focus needs to be placed on improving consumer confidence which in turn should lead to growth for businesses,” Mr Meekin added.
“It is likely the retail and leisure industries will take another hit in the first quarter of 2012 as those industries face a dip once the festive season has passed.” Phil Meekin says figures showing company collapses in different sectors are more telling than Government statistics that suggest an over all increase of 6.5 per cent in company liquidations in England and Wales since last year.
Figures for the most recent quarter show the number of construction companies going into administration has risen by 38 per cent. The figure for hotels and restaurants is up by 26pc and wholesale and retail administrations up 20pc.
That contrasts with a seven per cent increase in the number of manufacturers hitting problems and a 34 per cent decrease in the number of companies from the transport, storage and communications sectors reaching the end of the road. Mr Meekin is, however, particularly cautious about taking any joy from that fall.
“Many might assume that this is a sign of improving business within the industry.
“I would say that it illustrates the extreme challenges this industry has faced over the last two or three years.
“It demonstrates that the haulage and transport companies were the first to be hit hard by the economic downturn and many companies fell early on, leaving fewer companies to go into administration as time progressed,” Mr Meekin adds.