2,460 MANUFACTURERS TO GO OUT OF BUSINESS IN 2009

27 August 2009 2,460 MANUFACTURERS TO GO OUT OF BUSINESS IN 2009 But research shows light at the end of the tunnel for manufacturing industry Manufacturing output remains significantly below pre-recession levels and there will be a high of 2,460 business failures in 2009, compared to the 1,600 recorded in 2008, according to the latest Industry Watch report by accountants and business advisors, BDO Stoy Hayward LLP. Despite this, the manufacturing sector is likely to be one of the better performing areas of the economy following the downturn. Recent output figures have shown growth in the sector and further output data from the Office for National Statistics is to be released this Friday 28 August. Going forward into 2010, business failures are expected to drop to 2,090. As the manufacturing industry emerges from the downturn, a variety of factors will signal an improved outlook. Among these are the easing of credit constraints, lower sterling exchange rates and increased domestic and external demand. Robin Lloyd, business restructuring partner and manufacturing sector specialist at BDO Stoy Hayward LLP Southampton, said: “There are evidently still challenging times ahead for the manufacturing sector, with high levels of business failures expected in the coming months. “But the inventory cycle has a key role to play in the recovery and businesses that draw their destocking to a close and increase their inventories, will contribute significantly to the rebound in the industry. This, alongside reduced restraint on credit and lower sterling exchange rates, signals light at the end of the tunnel for the manufacturing sector.” ENDS For more information, please contact Laura Gainsford on behalf of BDO Stoy Hayward on 020 7260 2700 or laura.gainsford@bluerubicon.com or Gill Carson at BDO Stoy Hayward on 020 7893 2761 / or email gill.carson@bdo.co.uk Notes to editors: Methodology notes 1) Industry Watch is the first study to make projections of total business failures and the business failure rate in Great Britain by sector, based on data for compulsory liquidations, creditors voluntary liquidations, administrative receiverships, administrative orders and company voluntary arrangements (CVA) provided by the Department for Business, Enterprise & Regulatory Reform. 2) The BDO Industry Watch model uses 33 key variables which have shown to be related to business failures by sector. The total number of business failures for Great Britain is based on the aggregated sector forecasts. 3) Annual business failure rates are based on the number of VAT-registered enterprises and cebr have produced forecasts for the number of VAT-based enterprises expected in 2008 to 2012. About BDO Stoy Hayward LLP 4) BDO Stoy Hayward LLP operates across the UK with over 3,000 partners and staff. BDO Stoy Hayward LLP is a UK limited liability partnership and the UK Member Firm of BDO International. BDO international is a world-wide network of public accounting firms, called BDO Member Firms. Each BDO Member Firm is an independent legal entity in its own country. The network is coordinated by BDO Global Coordination B.V., incorporated in The Netherlands, with its statutory seat in Eindhoven (trade register registration number 33205251) and with an office at Boulevard de la Woluwe 60, 1200 Brussels, Belgium, where the International Executive Office is located. In the UK the Belfast Firm is operated by a separate Partnership known as BDO Stoy Hayward - Belfast. BDO Stoy Hayward LLP and BDO Stoy Hayward - Belfast are both authorised and regulated by the Financial Services Authority to conduct investment business. BDO Stoy Hayward LLP and BDO Stoy Hayward - Belfast are both authorised and regulated by the Financial Services Authority to conduct investment business. BDO Stoy Hayward is an award winning firm. Recent achievements include: • Best Workplace UK - Financial Times 2008 • Audit Team of the Year – Accountancy Age Awards 2008 • Tax Team of the Year – Accountancy Age Awards 2008 • Corporate Finance Deal of the Year – Accountancy Age Awards 2008 • 100 Best Companies to Work For - The Sunday Times 2008 • The Women of Achievement Award – Women in the City 2008