According to a report published by Atradius, the global credit insurance and debt collection group, insolvencies are forecast to rise globally in 2019 for the first time in a decade. The UK is predicted a 7% rise. The collective world economy, however, fares slightly better but with a forecast for growth at only 2.7% in 2019, the forecast increase in solvency rates worldwide is an average increase of 2%.
At a predicted 7% increase, the UK is top in Europe, closely followed by Italy at 6%. Next in line are Switzerland and Sweden at 3% with the Netherlands, Germany, Austria and Norway featuring equally with forecasts of a 2% increase.
But the question we’re asking is – what does this mean for UK insolvency professionals?
Firstly, and most obviously, there will be a greater demand for insolvency services. This means that the profession will see an increase in instructions that hasn’t been there for many years, due to recent benign trading conditions.
Undoubtedly, any increase in insolvencies dispenses pain for companies needing to go through an insolvency process, their customers, suppliers etc. At Griffin James, we note that downturns are always followed by a period of sharp growth, and there will be an undoubted renewal of both financial and skills-based resources.
This is crucial to the UK to fuel future economic growth, which we look forward to witnessing once the (hopefully) short-lived downturn has passed.