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According to accounting firm Taylor Woodings, the number of companies that collapsed in January rose by 21.2% from the previous year, marking a record monthly total.

The increase was reported by accounting firm Taylor Woodings and was covered in the InvestSMART article summarising their findings.

Taylor Woodings attributed the rise to a mix of factors highlighted in the article: a strong dollar, tight lending conditions and volatility in some industries.

The article notes a strong dollar as a contributing factor; in general, currency strength can squeeze revenues for some businesses and change competitive dynamics, which can increase financial stress for vulnerable companies.

The article cites tight lending conditions as a cause; broadly, when banks and lenders restrict credit or raise borrowing costs, companies that rely on loans for working capital or refinancing can struggle to stay afloat.

Taylor Woodings points to industry volatility as a factor; for investors this means certain sectors may see rapid swings in earnings or demand, so keeping an eye on sector-specific risks and company fundamentals is important.

While the article doesn’t give investment advice, a sensible response for investors is to review portfolio exposures, check the financial health of holdings, consider diversification, and be mindful of credit and sector risk.

The InvestSMART article summarises the Taylor Woodings findings referenced here; for further detail you can look for Taylor Woodings’ original release or follow-up reporting cited by InvestSMART.