John and I hope that 2011 has got off to a good start for you and that it proves to be a healthy, happy and prosperous year for us all.

The weather has created something of a difficult start for all of us and our thoughts are with those having to cope with the heavy flooding in Queensland. Floodwater invading your home and place of work is an ordeal at the best of times but the threat of encountering an angry snake or a hungry saltwater crocodile in the water, takes it to another level, doesn't it?

On the positive side, the catastrophe will provide a great boost for the KBB industry over there once the floodwaters have receded and the complicated cleaning up and drying out processes have been completed!

Closer to home, I am pleased that the Government has recognised the need to promote UK manufacturing with the unveiling of its proposals for a £200 million network of Technology and Innovation Centres (see 'This Week's News', below). I've been regularly amazed by some of the innovations I've discovered during my two years in the KBB industry but am sure that there is still more to come, so am hoping to see some familiar names becoming involved. 

In other news just in, business advisory firm Deloitte (www.deloitte.co.uk) reports that company administrations declined by 35% in 2010 - from 3,188 in 2009 to 2,086 - and that the property and construction sector accounts for one in five of those administrations.

The last quarter of 2010 saw a decline of 6% on the previous quarter, with a total of 438 companies falling into administration compared with 467 in Q310.  

Of course while statistics may have improved, the reality is that many companies are still in a precarious position. A large number of these have been able to stay afloat because of low interest rates, a lenient approach by lenders and HMRC's favourable 'Time to Pay' scheme. Deloitte believes that the rapidly changing economic environment will no longer make this sustainable.

The property and construction sector bore the brunt of the economic downturn in 2010, with 453 companies going insolvent. However, this is a significant decline of 34% from 2009 when 683 companies in this sector went into administration.  

"Risk of insolvency plays a big part in the property and construction industry because of its heavy reliance on supply chain relationships. Whilst many of the smaller property and construction firms would have been affected in 2008 during the early stages of the downturn, the sector still remains the largest to be hit by the market slow down, accounting for one in five administrations in 2010," say the researchers.

The retail industry showed healthy signs of resurgence in 2010 with a 43% decline in administrations from 165 compared to 290 in 2009. 

Whilst these figures will no doubt encourage those in the retail sector, we will undoubtedly see a growing number struggle to cope over the coming months as they buckle under the pressure of Government spending cuts and the increase in VAT and fuel costs which will see consumers cut back on spending in an attempt to make ends meet.

Yours,