More than 1,200 firms insolvent over past year
There were 1,285 insolvencies of companies in the West Midlands in the last year since the start of the coronavirus pandemic.
Business Rescue Expert has analysed data from the past 12 months for its The Year of Lockdown report, which reveals the state of businesses, the liquidation rate and the sectors and regions most likely to undergo an insolvency event.
In the West Midlands there were 222,000 active companies in 2020 and the loss of 1,285 means an insolvency ratio of one in 173.
Corin Crane, chief executive of the Black Country Chamber of Commerce, said: “Businesses have faced substantial turbulence and interruptions over the last 12 months with factors including Brexit and Covid-19 further adding to long-standing trading pressures.
“We know the disruption and consequences of the pandemic will continue to cast a long shadow into 2021 as government interventions and lockdown ends with more businesses confronted within an altered trading landscape.
“The chamber remains on hand to support its members and will continue to call for the support required to make sure they are able to trade through this year and beyond and will fight as hard is it can to prevent a major insolvency event from affecting the region.”
Richard Sheehan, chief executive of Shropshire Chamber of Commerce, said: “It’s always very sad when we see even one insolvency.
“Inevitably they happen and will continue to happen. That’s someone’s livelihood and job and we have to be mindful of the people going through this.
“The Government support has made a difference through these times to support businesses. Without it we would have seen even higher insolvency numbers.
"The concerns are businesses are currently just surviving and when support packages unravel we could see an acceleration of failures.
"The Government and banks need to understand businesses need the time to get back up to speed and deliver a level of profit to be able make those support repayments.”
The Business Rescue Expert figures show that a business in the Yorkshire and Humber region was statistically most likely to undergo an insolvency event than in any other region at one in 115.
The total number of corporate insolvencies actually fell in 2020, to their lowest recorded levels since 2007. The main reasons are the variety of Government-backed Covid-19 support measures.
There have been 8,205 company insolvencies across the UK from March last year to January.
The construction sector saw the most at 1,634 followed by hospitality 1,378 and retail 1,355.
Chris Horner, insolvency director with Business Rescue Expert, said: “Ominously, even with restrictions being lifted and economic activity rising, 2021 will be a worse year for insolvencies in several industries than the year of lockdowns was.”
