Uncertainty sees jump in number of business failures

Businesses are being urged to make sure they can adapt to market changes after data published today revealed that the number of Scottish firms failing grew by about 30 per cent year-on-year in the third quarter amid 'prolonged' economic uncertainty.

KPMG's Blair Nimmo said the business failure figures reflect long-term economic uncertainty. Picture: Contributed

However, there was improvement on the previous three months, according to professional services firm KPMG, which said the total number of corporate insolvency appointments increased to 230 in the three months to 30 September.

Administration appointments, which usually involve larger businesses, grew by 42 per cent to 27, and liquidation appointments, which tend to affect smaller businesses, jumped to 203 from 158.

Compared with the prior quarter, there was a 14 per cent drop in the number of insolvency appointments, while administrations grew 13 per cent and liquidations fell by 17 per cent.

Blair Nimmo, head of rest­ruc­turing for KPMG in the UK, said the statistics are “more reflective of the long-term impact uncertainty has had on the economy in the past 12 months or so” rather than the Brexit vote.

“In order to continue to grow and thrive in a post-Brexit environment, companies must ensure they plan appropriately so they can adapt to any changes in market conditions,” he said.

Data published separately today by accountant Deloitte found that risk appetite among chief financial officers of top UK firms remains “subdued” after the Brexit vote, with 82 per cent saying now is a bad time to take risk onto their balance sheet.

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