Builders and headhunters under financial pressure as insolvencies edge up – but there could be hope for retailers

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Retail has held up well over the summer, KPMG said (Source: Getty)

The number of firms collapsing into administration rose in the third quarter, according to notices filed with the Britain's official public record.

Analysis of the London Gazette revealed some 302 companies appointed administrators during the third quarter, up from 297 in the second quarter and 295 in the same period 12 months ago.

The steady rate of firms that are failing is symptomatic of "the benign economic climate we’ve seen in the UK over the last 18 month", according to KPMG head of restructuring Blair Nimmo.

The retail sector, heavily shorted by hedge funds believing it is in for a tough time, appeared to be holding up well though.

Nimmo said:

Following a challenging time for retailers over the first six months of the year, it appears the sector steadied over the summer, although all eyes will now be turning to their performance over their busiest and most important final quarter of the year

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Meanwhile, with concerns over house prices and a number of contractors struggling, KPMG warned there could be trouble ahead for other sectors.

Sectors that do appear to have undergone a degree of stress over the quarter include building and construction, manufacturing and interestingly, companies who offer recruitment and temporary manpower services – perhaps emblematic of the low unemployment rate currently seen across the UK economy.

The analysis follows a separate warning last week that the restaurant sector is facing extreme financial pressure.

Almost 15,000 eateries are facing a real insolvency threat as rising staff costs and the fall out of Brexit put a strain on the sector, accountancy firm Moore Stephens said.

Over half of all food is imported, with three-quarters coming from the EU. Such imports have become increasingly costly for restaurateurs with sterling more than 10 per cent weaker against both the Euro and US dollar since the Brexit vote.

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