PwC comments on Q4 2023 insolvency data

Jane Steer, Partner in PwC’s restructuring team said:

“Today’s data shows there were 6,788 insolvencies in Q4 of 2023, which represents a 14% increase on the same quarter in 2022. Whilst the number of administrations fell in Q4 2023, these statistics round off a very difficult year for business, with a total of 25,158 corporate failures in 2023 - the highest number of insolvencies in 30 years.

“Whilst Creditors' voluntary liquidations (CVLs) were at a record high in 2023, increasing creditor pressure and the rise in winding up petitions means the number of compulsory liquidations are now back at pre-pandemic levels, demonstrating declining goodwill across supplier bases. 

“Retail, hospitality and leisure suffered particularly in 2023. Compared to the year before, there was an 18% increase in insolvencies in the retail sector and almost 28% increase in hospitality and leisure. While these statistics reveal significant pressures in the sector, over 97% of these insolvencies impacted businesses with revenues less than £1m, highlighting the pressure faced by small businesses from rising costs. Looking forward, many businesses large and small must now weather the traditional post-festive downturn in spending. It remains to be seen whether the discounting and offers being extended to consumers will be enough to tide some of these businesses over. 

“There are concerns among businesses that the challenging external conditions will persist throughout 2024, and dampen prospects of a decrease in insolvencies. Indeed, in our recent CEO Survey, a fifth of UK chief execs said they are either highly or extremely exposed to macroeconomic volatility and inflation this year, demonstrating the knife edge that many companies find themselves on.”