Fewer manufacturers enter administration

A report by Deloitte, released today (20 April) revealed that 91 manufacturers fell into administration compared to 175 in the first quarter of 2009, and 102 at the start of the economic downturn in 2008. Administrations across all industries fell 46% year on year over the first quarter; furthermore the 1154 companies that went into administration from October 2009 to March represented the fewest administrations in the six month period over the past four years. Although hailing the results as positive, reorganisation services partner at Deloitte Lee Manning (pictured) warned: "Administrations are falling, it is another question whether this will continue with lenders retaining an appetite for debt for equity swaps rather than formal insolvency procedures. It will be interesting to see how this plays out after the election when new legislation may come into force. Those businesses that have already done everything they can to manage cash flow may not be able to tighten their belts any further and consumers will no doubt have to rein in discretionary spending. Businesses are not out of the woods yet and the outlook for the latter part of 2010 should be viewed with caution."