Kent hit by increased administrations in construction and services

Businesses in Kent and the rest of the South East England have suffered from an acceleration of administrations over the past year.

A survey conducted by Baker Tilly suggests a 32% rise in administrations, year on year (2010 to 2011).

Sectors particularly hard hit are service sectors at 30% and construction at 22%. 2010 has seen a specific squeeze on these sectors as contracts decline or cease altogether and more services are taken in house. In addition the harsh weather in the winter and the tightened consumer spend post Christmas have contributed to even tougher market conditions.

Overall administrations fell by 8.2% across England in the first quarter of 2011 compared to the same period in 2010. However, despite this fall individual regions’ relative performance has been extremely varied.

For example, North East, Yorkshire, Humberside and the Midlands have seen a decrease of 31%, 20% and 10% respectively.

Matt Haw, partner at Baker Tilly Restructuring and Recovery LLP said:

“These figures show a reversal in fortunes when comparing the North and South in previous quarters. However, it may be too soon to say whether this is an emerging trend.”

Traditionally the South East is the first to recover alongside London as the services sector is strongly predominant in the region.

  

“Less surprising is that the retail sector has struggled as less spending power and tighter household budgets have brought tougher conditions post Christmas,” added Mr Haw.

The first four months of every year is typically a challenging time for many businesses. However, the 0.4% decline in GDP indicates further unforeseen pressure on Kent economy.