LONDON (Thomson Financial) - Corporate insolvencies in England and Wales fell by 7.3 pct in 2007 compared with 2006, despite the effects of the credit crunch during the last few months of the year, figures from PricewaterhouseCoopers showed.
A total of 11,147 businesses across England and Wales entered into insolvency last year, against 12,031 in 2006.
Mike Jervis, partner in the Business Recovery Services practice at PricewaterhouseCoopers attributed the improvement to "the growing sophistication amongst management teams of distressed businesses and other stakeholders and the fact that techniques to avert insolvency are now very well developed".
"Businesses, banks and their advisers now have a track record of spotting problems early and acting quickly to put in place financial and operational restructurings," he said.
However, he said 2008 could be a different story as companies face the problems associated with the credit crunch, slower economic growth, and reduced consumer spending power.
"While the UK economy has shown resilience over the last twelve months, there remain substantial risks going forward... this is not the right moment to relax," he said.
The details of the release revealed some differing trends across sectors. While manufacturing and retail insolvencies fell by 14.8 pct and 6.4 pct respectively over 2007, insolvencies in the hospitality and leisure sector jumped by 22 pct.
Jervis said the troubles in the hospitality and leisure sector have been largely due to the smoking ban, increased competition from supermarkets, rising costs and a general slowdown in consumer expenditure. These insolvencies, however, have "tended to be at the smaller end of this market", he said.
Source: http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=638d0b9f-f013-43d7-a948-ad866a0d55f8
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