When it comes to corporate insolvencies, 2023 started as it ended, with consistently higher numbers than 2022 for 10 months out of the year. The Insolvency Service’s report on December 2023’s numbers should come as no surprise to anybody following their monthly insolvency statistics releases over the last 12 months. Like almost every other month beforehand, December 2023 saw more company closures than its equivalent month in 2022.
Fortunately, December 2023 didn’t suffer a particularly large increase compared to December 2022. The Insolvency Service recorded 2,002 registered company insolvencies in England and Wales, instead of the 1,965 that December 2022 saw. This 2% rise was made up of 1,731 creditors’ voluntary liquidations, 103 administrations, and 15 company voluntary arrangements.
December’s figures mean that over the course of 2023, 13.4% more companies entered into insolvency than in 2022. Looking at the year in total, 25,096 businesses filed for insolvency in 2023 compared to 22,127 the year earlier.
Only April and July recorded lower insolvency figures than 2022, with some months showing significant increases (May’s 40% increase being the highest of the lot). With this in mind, there was little expectation that December would buck the trend, but it did manage to fare better than November.
Impact of Christmas rush?
An 18.8% fall in insolvencies from the month prior was a silver lining in December’s cloud. Cynics though, may point to the Christmas rush as a busy period for many businesses, and may have already expected a slight improvement on November’s figures as a result.
Managing Director of Forbes Burton, Rick Smith, said of the numbers “It’s a shame that 2023 couldn’t have ended on a more optimistic note, but at least December’s 2% increase in insolvencies from December 2022 is relatively low when compared to other months we’ve seen this year.
Unfortunately, those 2,002 corporate insolvencies still mark a higher level than those seen during the last four years, which include Decembers recorded before and during the COVID-19 pandemic”.
Optimists may point to the shortening of the gap between December 2022 and December 2023’s figures as potential for a slowdown in corporate insolvencies during the beginning of 2024. Unfortunately though, Improvements seen over one month have yet to develop into a trend recently, with April’s surprise 15% decrease in insolvencies swiftly followed by May’s bruising 40% increase.
Worried about running a business in 2024?
Hopefully the new year might bring easier economic conditions to work in, but with little change on the horizon, business owners are understandably concerned about the year ahead. We’ve helped countless businesses to assess their options when they’ve found the business landscape difficult. By calling for free, no-obligation advice from one of our friendly specialists, you’ll be given all the guidance you need for the best route to take your business.
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