Recession alert as NI company insolvency rate up by 21.5%

A DOCUMENT detailing a rise in the number of business insolvencies throughout the UK is no surprise, says a director from a professional services firm here.

Gareth Latimer, director, recovery and reorganisation, at Grant Thornton in Belfast was speaking following the publication of company insolvency statistics for Q3, from July to September 2019. The document, compiled by the Insolvency Service, showed that there were 79 company insolvencies in Northern Ireland in Q3 2019, which is 21.5% higher than the same quarter in 2018.

Of these, 45 were compulsory liquidations (up from 30 in Q3 2018) and 27 were creditor voluntary liquidations (up from 24 in Q3 2018). There were three administrations and four CVAs.

Mr Latimer said: “The increasing numbers of insolvencies recorded in Northern Ireland in the third quarter of 2019 is hardly surprising given the current political and economic uncertainty being experienced at a local, national and global level.

“There was a rise in both company and personal insolvencies in the three months to September, by 21.5% and 34% respectively compared to the same period last year.

“The 79 company insolvencies resulted from an increase in both compulsory liquidations and creditor voluntary liquidations while the 718 personal insolvencies recorded represented a rise across all types including IVAs, bankruptcies and Debt Relief Orders.

“Given the recent UK general election announcement and the Brexit extension, it will be interesting to see if the number of insolvencies continues to rise.

“Should insolvency rates increase further over the remainder of 2019 and into next year, it would do little to alleviate the concerns of some economic analysts that have already pointed to signs of a possible looming recession.”

Elsewhere in the UK, England and Wales experienced 4,355 insolvencies in Q3 2019 — an increase of 1.6% on last year — while in Scotland there were 252 total insolvencies, an 8.6% increase on Q3 2018.