Insolvency professionals believe that manufacturing and retail businesses may be at the greatest risk of insolvency as a result of the economic uncertainty arising from the Brexit result.
More than 400 delegates at this month’s Restructuring and Insolvency Conference – the largest event of its kind in Europe – were asked to give their opinion on how the referendum result may affect business.
Almost two thirds of those polled (62 per cent) believed that the number of corporate insolvencies would increase as a result of the financial turbulence which has followed the summer’s vote.
When asked their views on how Brexit would impact on specific sectors, a sizeable proportion of professionals thought that manufacturers and retailers were most likely to be put under pressure in the short term.
In the case of retail outlets, there are concerns that the plummeting value of the pound will affect consumer spending, while manufacturers are likely to be hit by an increase in the cost of imported goods.
Figures from the Centre of Retail Research have shown that 18 retail outfits have gone into administration this year, with a loss of more than 20,000 jobs in total.
The property sector – which has been buffeted by currency fluctuations and reports that some parties are unwilling to go ahead with transactions – was also identified as vulnerable.
Interestingly, delegates seemed more confident that financial services and the hospitality sector would be able to weather the storm, with a relatively small proportion of respondents believing that these sectors would be hardest hit.
