Manufacturing business failures fall as confidence returns

According to business advisory firm Deloitte, the number of manufacturing business failures for each quarter this year has been significantly lower than the same period in 2009, with just 66 administrations in Q3 2010, almost half the 128 seen in the same period in 2009. Ross James, manufacturing partner at Deloitte, commented: "While there are still mixed messages around confidence in the manufacturing industry, the rate of business failures in the sector is falling which is a positive sign. The decline in administrations highlights the success of the proactive approach adopted by many manufacturing businesses to manage both their cash flows and stock levels. In addition there is now some more, albeit fragile, confidence in the corporate sector to invest, which is translating into orders for capital goods manufacturers. "As a further signal of confidence, M&A activity in the manufacturing sector has picked up over the past quarter as companies with strong balance sheets are looking to invest and grow." Administration data from the first nine months of the year shows that the retail sector enjoyed the highest rate of decline with administrations down 50.2%, followed by financial services (47.1%) and manufacturing (42.6%).