More insolvency pain to come in NW
An insolvency expert has predicted big players in the automotive, commercial property and tourist trade in the North West are set to feel the impact of the recession.
David Costley-Wood, a partner at finance firm KPMG's restructuring division in the North West, warned "time is running out" for many firms.
However, figures out from the group on Friday showed the number of companies going into administration in the region fell from an average of 48-a-month to under 35.
The expert said the drop was "very unusual" in the middle of a recession but likely to be a respite before a second wave of insolvencies rather than a recovery.
Mr Costley-Wood said: "We expect to see further fall out in the automotive sector, particularly the supplier base, where many companies have ever decreasing options in the absence of demand.
"Commercial property is a sector whose problems can't be brushed under the carpet for much longer, with billions of refinancing needed by the end of the year, it looks set to suffer later this year.
"September is likely to be the crunch month for many businesses in tourism and leisure with the busiest period of the year over.
"With demand expected to be at new lows, even larger industry players could be affected."
He added that the last quarter of the year, when management had "run out of options" to avoid insolvency, he expected to see businesses with turnovers between 50-250m going to the wall.
Nationally, there has been 1,571 insolvencies this year which is far behind the 5,000 predicted for 2009.
In the North West there has been 241 so far this year with February and March the hardest-hit months with 63 and 60 insolvencies respectively.
Mr Costley-Wood said: "Our conversations with businesses and lenders suggest this number will be reached quickly after the holiday season with a wave of insolvencies in quarters three and four."
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