A RISE in the number of businesses failing in Scotland must be seen in “the wider picture”.
The global head of restructuring for accountancy firm KPMG, Blair Nimmo, cautioned against drawing overly pessimistic conclusions from the latest insolvency figures.
KPMG figures should that in the first three months of 2019, there was a rise of 52% in businesses failing on the same period last year – 355 compared to 233.
However, a 12-month analysis shows a smaller increase of only 19%.
While the three-month analysis for administrations increased by 73%, the 12-month comparison shows an 8% reduction.
Nimmo said: “The total number of administrations increased significantly compared to the same period last year, and indeed over last 12 months, albeit at lower levels.
“It is likely a significant number of liquidation appointments can be attributed to housekeeping, whereby businesses and shell companies which ceased trading some time ago are liquidated as matter of course.
“Figures therefore do not fully reflect the wider picture of the Scottish business landscape, which, at the end of 2018 actually saw a fall in the total number of insolvencies.
“Analysis of the 12-month picture reinforces this – showing an 8% decrease in the number of administrations, which, against the uncertain economic backdrop most businesses are operating within at present, is encouraging.
“That being said, challenges undoubtedly remain for Scottish businesses.
“We haven’t seen a more uncertain and complex political environment in the UK for quite some time. As ever, we continue to encourage clients to develop robust contingency plans in the event continued Brexit uncertainty.”
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