Fewer manufacturers going bust, Deloitte research finds
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The number of UK manufacturing firms going bust has declined 18% year on year, suggesting that confidence has returned to the sector, but the new figures published yesterday (12 May) come with a health warning.
The number of manufacturing companies falling into administration in the first quarter of this year dropped to 86 compared with 105 in the same period last year, according to research by the business advisory firm Deloitte.
The firm's manufacturing partner Ross James said: "The manufacturing sector has shown positive signs of recovery, over the past 12 months and this reflects a healthier industry. Orders picked up throughout last year, driven by a recovery in end demand. The 20% decline in sterling against the euro has undoubtedly helped to give a much needed boost to exports in the sector. There were fewer administrations in this sector in 2010 than in any of the previous three years.
"This trend is encouraging but the Q1 2011 figures lend a note of caution to this optimism. The number of administrations in Q1 2011 is higher than the previous three quarters in 2010 possibly indicating that demand is softening. This, combined with recent data on purchase orders is less encouraging, and we cannot preclude a further rebound in these figures if the recovery in demand is not sustained."
