Number of manufacturers going out of business drops dramatically
1 min read
The number of UK businesses going bust in the manufacturing sector has dropped 46% for the first half of the year compared with 2009, painting a far more positive outlook than six months ago, when annual administration figures for 2009 indicated that manufacturing was the second hardest hit sector of the economy, representing 17% of total administrations for the year.
Ross James, manufacturing partner at the business advisory firm Deloitte, which compiled the data, commented: "The manufacturing sector is certainly in a better position than it was a year ago, however demand has not increased to the level required to give the sector the boost it needs. While we are seeing order books pick up, businesses have tightened up operationally and are running with a lower level of working capital, so the significant 'restocking effect' that was hoped for has not happened. Corporate investment in capital expenditure also remains tight. While there are certainly a number of issues at play affecting UK manufacturing, end demand and business investment are the primary drivers and until there is a significant and sustainable increase in demand, the outlook for the sector will continue to be uncertain."
Administration data from the first half of the year shows that the retail sector enjoyed the highest rate of decline with administrations down 57% year on year, followed by the manufacturing sector (46%) and property and construction (43%).
