South West businesses accounted for 5% of administrations in the first six months of 2023.
Analysis from law firm Shakespeare Martineau found that the region was the sixth lowest in the º£½ÇÊÓƵ with London leading the way with 25%, followed by the North West at 15% and the South East at 11%.
Shakespeare Martineau looked at data from The Gazette Official Public Record, finding that from a total of 759 businesses, 41 administrations came from the South West between January 1 and June 30, marking a 22% increase compared to the same period last year.
Data showed that retail, manufacturing, construction, hospitality and real estate were the worst-hit sectors, accounting for 57% of all administrations. An insolvency and restructuring expert has warned more businesses will fail unless inflation is controlled and interest rates stops being increased.
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Andy Taylor, partner and head of restructuring at Shakespeare Martineau, said: “Given the prolonged economic uncertainty that is plaguing the country, the increase in the number of businesses filing for administration is no surprise.
“HMRC is definitely taking a harder line than in previous periods and its threat of enforcement is certainly pushing some businesses towards considering their options, with some seeking administration as an alternative to facing a winding up petition.
“We’re seeing a steady flow of corporate failures. Should some other ‘bad news’ rear its head, then that is only likely to increase. Businesses and individuals need to see interest rates and inflation come down. With a period of stability, we will see confidence increase.â€
With the sector’s filing almost doubling when compared with the first six months of 2022, the retail industry replaced construction as the worst-hit sector. The hospitality, real estate and manufacturing sectors also remained in the top five.
Mr Taylor added: “Consumer spending is shrinking and footfall on the high street and in restaurants is declining as a result. The pressure is also on businesses as they face higher borrowing costs and energy expenses, so they are being squeezed from both sides.
“Our advice remains consistent – seeking professional advice early can open up more options for struggling businesses. It is crucial not to ignore the signs and bury your head in the sand, and, instead, take a proactive approach to address underlying issues. By doing so, businesses can better navigate the tough trading conditions and increase their chances of survival.â€
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