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South East businesses accounted for 12% of UK administrations in 2023, analysis reveals

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South East businesses accounted for 12% of UK administrations in 2023, analysis reveals

 

South East businesses accounted for 12% of administrations in 2023 – the third highest region in the UK – according to analysis by Sussex law firm Mayo Wynne Baxter.

 

A total of 1,641 businesses, 205 of which came from the South East, filed for administration last year – marking a 22% increase compared to 2022 and 91% rise in comparison to 2021.

 

Retail, construction, hospitality, manufacturing, and real estate were the worst-hit sectors, collectively accounting for 59% of the administrations.

 

Regionally, Greater London led the way with 22% of the filings, followed by the North West (14%) and South East (12%), data from The Gazette Official Public Record has revealed.

 

While January (76) was the quietest month, administration numbers leapt to 177 in October – the most recorded for 43 months (185 in March 2020).

 

Pictured: Nick Stockley

 

Nick Stockley, dispute resolution partner at Mayo Wynne Baxter, said: “The significant uptick in the number of companies filing for administration in 2023 underscores the challenges faced by businesses amid changing consumer habits, financial pressures, and geopolitical uncertainties.

 

“In the labyrinth of economic complexities, the retail sector in particular is bearing the brunt, noted by the collapse of major player Wilko. There has also been a reduction in housebuilding, which has a knock-on effect in the construction and real estate sectors.

 

“The cost of money, marked by high interest rates throughout 2023, exacerbates financial strains on businesses with models that thrived in a sub-2% interest rate environment. Organisations can only bear that pressure for so long before its sustained impact starts to wash through and they begin running out of cash.

 

“A shift in consumer buying habits, exemplified by a challenging January for the hospitality sector, adds to the narrative of subdued spending. Moreover, HMRC continues to be more active, with threatened enforcement pushing businesses towards considering their options, and many opting for administration as an alternative to being wound up on a compulsory basis.

 

“The global stage, marked by geopolitical tensions in Russia-Ukraine and Israel-Gaza, contributes to economic uncertainty and suppressed growth. Businesses reliant on imports face increased outlays, as shipping companies opt to avoid the dangers of the Suez Canal and seek to pass on the extra costs of transport to customers.

 

“Many predict the rate of inflation to continue its downward trajectory in 2024, perhaps even approaching Bank of England’s target of 2%. If that trend continues one might anticipate something like three interest rate cuts in 2024, which will hopefully stimulate growth. However, the economic landscape remains unpredictable, and 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.”

 

For more information please visit: www.mayowynnebaxter.co.uk.

Businesses filing for administration per year

By sector

2023

2022

By region

2023

2022

Administrative

26

24

British Isles

12

3

Agriculture

7

10

East Midlands

130

74

Arts and entertainment

68

21

East of England

118

94

Automotive/transportation

87

72

Greater London

364

265

Construction

200

208

North East

61

50

Education

16

4

North West

231

212

Engineering

31

35

Northern Ireland

9

18

Financial

75

79

Scotland

63

59

Health and social

74

66

South East

205

213

Hospitality

190

140

South West

119

68

Information and communication

87

55

Wales

31

48

Manufacturing

186

174

West Midlands

139

101

Mining and quarrying

7

10

Yorkshire & The Humber

159

135

Others

7

10

 

 

 

Professional services

64

90

 

 

 

Public admin and defence

16

7

 

 

 

Real estate

155

95

 

 

 

Retail

239

138

 

 

 

Utilities

73

61

 

 

 

Total

1,641

1,340

Total

1,641

1,340

 

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