The number of UK manufacturing companies falling into administration has fallen dramatically in the first six months of 2010, according to figures from accountants Deloitte.
There were 167 manufacturing administrations from January to June this year. This is down from 311 in the same period last year and constitutes a 46% fall. This was the second best level of improvement, beaten only by the retail sector.
Figures accounting for all businesses roughly followed suit though and were down 43% from 1856 to 1065.
Ross James, manufacturing partner at Deloitte, said though the figures undoubtedly show conditions for the manufacturing sector are improving, the sector is still far from comfortable.
“Demand has not increased to the level required to give the sector the boost it needs,” he said. “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.”