There is a widening North/South business failure divide, with southern firms faring far better than their northern counterparts, according to Experian
The global information services company’s latest Insolvency Index found that London and the South East saw insolvency rates decrease between October and November, while company failures increased in the North East, North West and Yorkshire.
During November, insolvency rates were highest in the North West at 0.14% of businesses in the region, North East at 0.12% and Yorkshire with 0.11%.
By comparison, the South East, South West and Greater London recorded failure rates of 0.07%, 0.08% and 0.08% respectively.
Across the country, there was a small month-on-month improvement in the rate of business insolvencies, from 0.10% in October to 0.09% in November.
Out of the UK’s business population, this represents 1,736 firms failing in November.
This time last year, the insolvency rate was 0.07%.
Of the five biggest industry sectors – business services, building/construction, property, IT and leisure/hotels – property was the only one that saw its insolvency rate improve year-on-year, from 0.07% in November 2010 to 0.06% November 2011.
It was also the sector to see the biggest improvement from October, when the rate was 0.08%.
The average financial strength of businesses in the UK deteriorated by 0.5% in November, falling to 78.07 from 78.44 in October.
In November last year, the average financial strength score was 81.31.
Although smaller businesses – with 3 to 10 employees – have generally managed to maintain lower rates of insolvencies over the past year, they experienced the biggest deterioration in financial strength between November 2010 (an average of 81.80) and November 2011 (an average of 81.04).
Max Firth, managing director for Experian’s Business Information Services division in the UK & Ireland, said: “The latest insolvency index highlights that some businesses continue to need to assess the risk strategies they have in place very carefully.
“They need first to understand the risks they are exposed to and then protect themselves from debt that could be detrimental to their business on a regular ongoing basis.”
bridget.oconnell@estatesgazette.com
