South Yorkshire insolvency expert Paul Moorhead says a drop in the number of businesses facing failure shows that the economy is finally starting to show signs of recovery.
Latest official statistics provide evidence of an upturn as the number of insolvencies in England and Wales decreased overall last year.
Overall, 14,982 companies were wound up in 2013, a decrease of 7.3 per cent on 2012.
“The decrease in the number of insolvencies is good news for the economy,” said Paul, the insolvency industry’s Corporate Insolvency Practitioner of the Year and the founder and managing director of Rotherham insolvency practice Moorhead Savage.
“Whenever a company goes bust, it causes misery for creditors, suppliers, customers, employees and, of course, the owners of the business, so any reduction is welcome.
“However, it is worth pointing out the big drop seems to have been mainly due to a sharp fall in the number of compulsory liquidations – where a creditor forces a company to be wound up through the courts due to unpaid bills.
“It is hard to know the reasons for this decrease but the relatively high cost to the creditor could be a factor.
“Meanwhile, the number of liquidations caused by directors deciding to close the doors decreased by only 4.5 per cent during the year and the rate of decrease seemed to be slowing by the end of 2013.”