PwC comments on August 2024 insolvency figures

David Kelly, Head of Insolvency at PwC UK, said;

“Insolvency numbers for August 2024 (1,953) were down on both July 2024 by 9% and August last year by 15%. While it's tempting to attribute the dip to a typically quieter business period in August, this pattern wasn't evident last year, suggesting that other factors may be at play. A summer of sport and warmer weather from the end of July will have provided some relief to the retail and hospitality sector, offering a temporary boost in business activity.

“Despite retail and hospitality experiencing some respite, there has been an uptick in insolvencies within the business services, construction, and engineering sectors. The increase in the engineering sector, in particular, reflects broader pressures across the automotive supply chain. As a consequence, we’ve seen this reflected in a rise in insolvency numbers across the Midlands, where this industry is heavily concentrated. According to our analysis, the Midlands accounted for 17% of overall insolvencies in August 2024 compared with 14% in August 2023.

“An analysis of year-on-year data up to August 2024 indicates that insolvency figures overall are at similar levels. Historically, we tend to see more insolvencies as we come out of a recessionary landscape, with companies unable to fund the increase in working capital as order books strengthen. These factors suggest that the total insolvency figure for the year could once again exceed 25,000.”