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Businesses 'unrealistic' about insolvency rates

Published on 22 Jan 2010 under category: legal

Insolvency experts are more fearful about the economic outlook than businesses are, according to a new industry report.

The study by R3, the insolvency trade body, found that only eight per cent of insolvency practitioners felt that the economic outlook for 2010's first quarter was 'positive'.

In contrast, 39 per cent of businesses felt certain about the prospect of economic recovery this year.

Manufacturing companies had the most optimistic outlook with 53 per cent predicting a good year for commerce. The service sector was less positive with only 37 per cent sure of more profits this spring.

On the discrepancy between the two groups, R3's president Peter Sargent said: "Insolvency practitioners know that creditors tend to act more aggressively as we come out of a recession and corporate insolvencies continue to rise."

R3 also found that northern businesses were less confident polling at 37 per cent for a positive outlook than their southern counterparts (44 per cent).

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