The total number of companies falling into administration increased by 10 per cent during the first nine months of 2009 compared to the same period in 2008, according to analysis by Deloitte, the business advisory firm. While the total number of administrations for Q3 is down on the same quarter for last year, albeit a marginal drop of six per cent, recovery is still not being felt across the board.

Richard Hawes, reorganisation services partner at Deloitte, said: “In spite of talk of economic recovery, it is evident that the situation is far from rosy. These administration figures highlight what businesses are experiencing right here and now. The number of companies falling into administration is still rising: although, if we are to look at our analysis of the first half of the year, which saw administrations increase by 18 per cent, the pace appears to be decelerating as we move further into 2009.

“The property and construction sector is holding fast. Administrations in the sector have risen just seven per cent in the first three quarters of the year compared with the same period in 2008, and are down 14 per cent in Q309 compared with Q308. "Property was one of the first industry groups to be hit 18 months ago. "We have since seen a weeding out process with the stronger and better managed businesses coming through. These businesses have restructured and refinanced through various measures including debt for equity swaps and rights issues, thereby buying themselves a life line. "It is not surprising then that these figures are slowing down, and even dropping.

“We are seeing a similar situation being played out in the retail sector. "Administrations in Q309 are down 32 per cent compared to Q308, and have held steady in the first three quarters of the year with a slight rise of eight per cent compared to the same period the previous year. The increasing trend towards using CVAs as a rescue mechanism rather than the more straightforward prepack administrations, has also had an impact.

“The shrinkage in the retail sector has, however, compounded the effects being felt in the wholesale sector. "Administrations in the wholesale and distribution sector have seen an increase of 38 per cent in the first nine months of 2009 compared to the same period in 2008, and an increase of 34 per cent in Q309 compared with Q308. "As the effects of the weak pound are being felt across the economy, wholesale prices are undoubtedly being impacted. "The repercussions of this, including reduced demand from retailers, means that wholesalers may be finding themselves without a guarantee of future trading and are suffering as a result.”