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Company Formation Closure Rates Surprise All

Once the government announced that UK was out of recession, one of the first things the British media did, was comment on the somewhat anemic nature of the country’s recovery – especially when compared to other nations – the second thing they did was to revisit all the gloomy statistics and depression predictions economists made at the start of the recession, and see if they had come true.

One of the figures they analysed was the number of companies the so-called experts predicted would go into administration during the downturn.  The results were surprisingly positive; while administration rates rose; the number of companies who survived the recession was many more than expected.

John Brannon, head of enterprise at JBK, comments: ‘As a rule, the number of companies which go into administration is an indication of the depth of an economic downturn. Therefore the results of our report were a little shocking – we all knew how poor market conditions were and how difficult it was for business to access finance and yet the number of companies which actually failed was a lot less than originally anticipated.”

While JBK say that the survival of many companies was due, to a large extent, to the tenacity and determination of the UK’s entrepreneurs, they are keen to highlight the positive impact the many government initiatives – such as the reduction in VAT and the ‘Time to Pay’ scheme – had on keeping the UK in business.

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