According to the Deloitte figures, 147 businesses in the North West went into administration in the first quarter of 2008, compared to 102 in the same period of 2007 – a sharp rise of 44.1%. In particular, the FPB is warning the UK's manufacturing and retail sectors, many of which have avoided going into administration despite the economic downturn, to be vigilant.

 

"The North West of England has been the entrepreneurial heartland of the UK since the industrial revolution, and the region continues to drive innovation through the small business sector," said Phil Orford, the FPB's Chief Executive. "This latest data indicates that North West businesses are suffering more than most. The Government recently introduced tax increases for small businesses knowing that the country was experiencing a credit crunch. As a result, the region's small businesses will now have to fight harder than ever to remain profitable."

 

Across the UK, the recruitment and business service sector experienced the biggest increase in firms going into administration, with 85 in 2008, compared to 36 in 2007 – a huge leap of 136.1%. Printing and publishing saw a 71.4% rise (from 21 instances of administration to 36), closely followed by mining, energy and agriculture with a rise of 66.7% (up from 9 to 15). Property, construction, electrical installation and plumbing also experienced an increase (up by 54.1%, from 109 to 168), as did film and photography, media and IT (up by 47.1%, from 34 to 50), healthcare and social services (22.2%, from 18 to 22) and hospitality and leisure (16.7%, from 60 to 70).

 

However, the UK's long-suffering manufacturing industry is showing signs that it has, so far, avoided the worst of the global economic downturn. The study found a 38.9% fall in the number of manufacturing firms going into administration, from 175 in 2007 to 107 in 2008. The number of retailers going into administration also went down, by 42.9%, from 98 to 56 instances. Similar positive trends were experienced by wholesale and distribution (with 30% less instances of firms going into administration, from 70 in 2007 to 49 in 2008), and transport and communications (a 25% decrease, from 64 to 48).

 

Deloitte's reorganisation services partner, Lee Manning, warned that businesses had experienced only the tip of the iceberg, and expects the retail and manufacturing sectors, in particular, to feel the impact of the credit crunch in the near future.

 

"Given the current economic climate, it is surprising to see a 43% fall in the number of retail businesses that went into administration this year, compared with the year before. In the manufacturing sector, we have seen nearly a 40% drop in administrations from the previous year," he said. "While the credit crunch bites hard in the City, with lenders all but closed for business at the larger end of the market, the pain has yet to be felt as severely in the manufacturing and retail industries."

 

Mr Manning added: "The data demonstrates that it takes some time for shifts in the economic cycle to impact profits, administrations, unemployment levels. It also suggests that the downturn may be felt for some time to come. It is unlikely that these relatively positive administration levels will continue throughout this year."

 

The FPB offers a range of money-saving products and services to help members to grow in spite of the current economic climate, including business guides covering topics from employment law to health and safety, legal expenses insurance supported by a 24-hour legal helpline, and asset finance.