Insolvency rate falls for fifth consecutive month
The latest Business Insolvency Index from Experian®, the global information services company, reveals that year-on-year business insolvency rates fell for the fifth consecutive month from 0.08 per cent in September 2012 (1,679) to 0.07 per cent in September 2013 (1,609).
Looking at insolvency rates by company size, larger companies (more than 501 employees), which have experienced increases over the last few months, have this month seen a fall – from 0.11 per cent in September 2012 to 0.10 per cent in September 2013.
Companies in the 100-500 employee bracket also performed better – showing the biggest fall in insolvencies from 0.16 per cent to 0.09 per cent.
Max Firth, Managing Director, Experian Business Information Services, UK&I said: “The drop in larger company insolvencies is welcome news, and it is encouraging to see that some of the key drivers of the economy such as Construction and Financial Services are performing well. By having a good handle on the financial position of both suppliers and customers, firms can keep on top of risks, as well as investing in growth areas where possible.”
Regionally, the North East saw a particularly sharp fall in insolvencies – from 0.32 per cent in September 2012 to 0.12 per cent in September 2013, meaning that there has been no rise in its rate since April this year. The next most improved region was Yorkshire with a fall from 0.12 per cent to 0.09 per cent.
It was a game of two halves for firms in the Midlands – with the West Midlands recording a rise in insolvencies from 0.07 to 0.09 per cent, while the East Midlands fared better with a decrease from 0.08 per cent to 0.05 per cent – its lowest rate for over five years. Whilst most regions recorded falling or level insolvency figures, there was a slight rise in the East of England, which saw its rate up to 0.10 per cent from 0.07 per cent last year.
Once again, the most significant drop was in the Building & Construction industry, with its rate dropping from 0.14 per cent to 0.11 per cent – the eleventh month it has fallen year-on year –reflecting a more benign environment for house-building. Banking and Financial Services also continued its positive trend, with a drop from 0.15 per cent to 0.10 per cent.
The Leisure & Hotel industry will be encouraged to see another drop from 0.13 per cent to 0.11 per cent. It is now a whole year since this industry saw a rise in its monthly insolvency rate. –. Sectors to see a rise in insolvencies included the food manufacture and food retailing businesses.