Business insolvency rates hit a five-year low
The latest data from Experian’s insolvency index has revealed that business insolvency rates in January fell to their lowest figure since the start of the financial crisis in 2007.
The figures show that 1,271 companies (or 0.06% of the business population) failed in the first month of the year, down from a figure of 0.07% in 2012 and down from a figure of 0.08% at the end of 2012.
The largest fall in insolvency rates in the month were seen by mid-sized firms, those with between 26 to 50 employees, falling from a figure of 0.20% to 0.14% in the year to January 2013.
The insolvency rate for companies with between 51 and 100 employees dropped by half year-on-year from 0.14% to 0.07% this January.
The downward turn in insolvency rates for companies with more than 501 employees was less marked between January 2012 and January 2013, decreasing from 0.20% to 0.15%.
Commenting on the figures, Max Firth, managing director of business information services in the UK and Ireland at Experian, said:
“Although January is typically a slow month for business insolvencies, the figures for January 2013 do show a marked decline in the insolvency rate, which in fact has hit its lowest level for over five years.
“This follows a relatively stable 2012, which itself was an improvement on the previous year.”
On a regional basis Scotland saw the most significant falls in insolvency rates, with the percentage of the business population failing declining to 0.03% from a figure of 0.07%.
Among the UK’s top five largest sectors leisure and hotels saw a marginal fall from 0.13% in January 2012 to 0.10% this year, while building/construction businesses saw their insolvency rates over the year make a modest fall from 0.13% to 0.12%.
The only two industries to buck this trend were property and IT sectors, with both recording increases in insolvency rates to 0.06% year-on-year, from respective figures of 0.04% and 0.03%.
If your business is failing, you may want to seek out professional insolvency advice.
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