Author: Ian Betteridge
Date: 04/02/2008
Is the economy really in such bad shape? Some indicators say not
Read the papers and you'd think that the economy is going into meltdown. Banks on the rocks, consumer confidence low, slow on the high street (unless you're John Lewis), and credit harder to get - all seem like signs that things aren't going too well.
But there are one or two signs that the economy might not be in as bad shape as it seems. According to statistics from the Insolvency Service, the number of businesses going into liquidation in the last quarter of 2007 actually fell compared to the previous year. What's interesting, though, is how the figures break down: the number of voluntary liquidations actually increased, while the number of compulsory ones fell.
Does this indicate that, perhaps, the underlying conditions of business aren't actually so bad? Of course, you could argue that the last quarter of last year is too early to indicate whether there's an issue for business or not. This year's insolvency figures will be far more telling, especially if there is a wide-spread credit crunch. But perhaps it's not really all doom and gloom after all.