Firms in Scotland have the lowest levels of insolvency risk of anywhere in the UK, according to research by insolvency and restructuring trade body R3.
In July, 21.8% of Scottish companies were at higher than normal risk of insolvency, against a UK average of 27.3%.
Tim Cooper, chair of R3 in Scotland, and a partner at Addleshaw Goddard in Edinburgh, said:
“The Scottish economy enjoyed a bounce in the first quarter of this year, with Gross Domestic Product up by 0.8%. The results from R3’s insolvency risk tracker support the idea that this positive growth has continued into the second quarter, as we have the lowest overall increased level of insolvency risk of anywhere in the UK, which is great news.
“Overall, July’s results show cause for some cheer, along with a strong dash of caution. With uncertainty in the air, no business should be complacent. The earlier expert advice is sought, the more opportunity there is to turn around a struggling firm, or to take pre-emptive action to avoid future troubles.”
Commenting, Kenneth Gibson added:
“Once again, independent analysis of the Scottish economy - on this occasion, insolvency risk - shows Scotland to be in good health relative to the rest of the UK.
“There can never be room for complacency and the fact that more than one in five Scottish companies are still potentially at risk is of concern. Any company in such circumstances should take action as soon as possible.”
The figures are from R3’s latest insolvency risk tracker. The tracker is compiled using Bureau van Dijk’s ‘Fame’ database and measures companies’ balances sheets, director track records and other information to work out their likelihood of survival over the next 12 months.