UK business insolvencies fell in January
Published: 09 March, 2011
NOTTINGHAM: The number of business failures in January were down by more than 10% compared to 2010.
The latest Insolvency Index from Experian showed a positive picture with only 1266 business failures in January 2011. This represented 0.07% of the UK's business community.
It compares with 1426 in January 2010.
The strength of the UK's business community also improved year-on-year, with its overall financial strength score improving from 81.16 in January 2010 to 81.49 this year.
Max Firth, managing director of Experian pH, said: "Our analysis shows that business failure rates are falling steadily and the financial strength of the UK's business community is improving.
"Our data also shows that the post-recession business population is beginning to increase once again, with the net number of firms trading up by 1% when compared with last January."
He warned that companies still needed to be vigilant and ensure that they have good insight into the financial risks associated with insolvencies among clients and suppliers. "With issues from fulfilling increased orders through to late payment, the knowledge of how these will affect cashflow is imperative."
Other highlights from the report include:
· Businesses in the South West continued to be the most robust, with the best financial strength score of 83.10 during January 2011.
· Yorkshire saw the biggest drop in the rate of insolvencies, from 0.14% in 2010 to 0.06% in January this year.
· Wales and the North West were the only two regions to see an increase in the rate of business insolvencies year-on-year. The North West had the highest insolvency rate in January with 0.11% of its business population failing, closely followed by the North East at 0.10%.
· In January 2011, medium-sized businesses (26-50 employees) had the highest rate of insolvencies at 0.17%.
· Businesses with 51-100 employees had the worst average financial strength score (81.48), although they did see a small year-on-year improvement (from 80.06).
· The oil industry remains the top performing sector in terms of financial strength leading the way with 85.98.