March insolvency figures reveal increased resilience amongst mid-sized firms
The latest Business Insolvency Index from Experian®, the global information services company, reveals that medium-sized firms which have struggled the most in recent years saw fewer insolvencies during March 2013.
The insolvency rate among businesses with 25-50 employees fell by 0.07 per cent from 0.24 per cent in March 2012 to 0.17 per cent in March 2013 – almost back to the levels seen in March 2007 of 0.16 per cent and nearly half their peak of 0.35 per cent in March 2009.
Insolvencies also fell by 0.07 per cent amongst businesses with 11-25 employees, down from 0.25 per cent in March 2012 to 0.18 per cent in March 2013.
The analysis shows that across the UK, the insolvency rate remained a 0.08 per cent of the business population for the second consecutive month this year. 1,736 firms failed during March 2013 – an improvement on March 2012 when the insolvency rate stood at 0.11 per cent.
Max Firth, Managing Director, Experian Business Information Services, UK&I said: “The fact that mid-tier businesses are seeing lower rates of insolvency is encouraging. These companies have struggled more than most during the recession as they are not necessarily small enough to be flexible, but are also not big enough to benefit from economies of scale.
“The overall rate of insolvencies for the first three months of 2013 is a significant improvement on the equivalent months in 2012 – from 0.27 per cent to 0.22 per cent. Today’s figures point to a more benign trading environment and suggest that companies are becoming much better at anticipating risk, getting their credit policies in shape and developing better relationships with customers.”
Taking a two-year snapshot of the regions, figures show that firms in the North East have fared the best with the insolvency rate decreasing by 0.10 per cent since March 2011 – the biggest fall compared to other regions and twice the drop of the next region – the East Midlands.
Of the UK’s top five biggest industries, Building and Construction saw the biggest fall in the insolvency rate year-on-year – from 0.19 per cent in March 2013 to 0.15 per cent in March 2012. Other big fallers year-on-year include insurance, breweries, leisure and hotels and utilities.