Business advisers and accountancy firm PwC has revealed the extensive effect the recession has had on construction and manufacturing, with nearly 10,000 insolvencies taking place within the past two years.
Since 2010, over 4,000 manufacturers have been forced to shut down their operations and PwC predict that 2012 could see the same numbers of manufacturers going under.
There were 424 manufacturing insolvencies in Q4 of 2011. Manufacturing did slightly better than the construction sector, experiencing a rise of 6.4% from Q1 to Q4 in 2011. Q4 2011 was more positive for both sectors in comparison to Q3 of the same year, where construction had 0.2% fewer insolvencies.
The UK regions that were most affected included London, Yorkshire, the West Midlands and the North West as challenging economic factors caused problems for manufacturing and construction businesses.
Jonathan Hook, head of engineering & construction at PwC said: “The cuts to the Government’s capital programme and uncertainty around the economy and financing generally means there is little chance that 2012 will see this trend reverse.”
Mr Hook added: “London reported a 5% decline in the number of insolvencies in the sector last year, highlighting that it is increasingly tough elsewhere in the regions, where we saw a 9% increase.”