Fewer business insolvencies in October
Published: 23 November, 2010
NOTTINGHAM: The latest Insolvency Index from Experian has revealed a significant year-on-year drop in business insolvencies during October.
The global information services company said only 1635 UK businesses failed last month, 17% fewer than the 1976 insolvencies recorded in October 2009.
This equates to an insolvency rate of 0.08% of the business population in October 2010, compared to 0.10% the year before.
The overall trend shows a general upward trajectory since May this year.
Max Firth, managing principal of pH, an Experian company, said: "It is encouraging that the business population in general is faring better in terms of insolvencies than this time last year, despite mid-market failures increasing in October. It remains key for organisations to ensure that they use data insight to help them understand and manage the risks in today's marketplace."
All regions saw year-on-year falls in insolvency rates, with Scotland again regaining its position as the region with the lowest rate of insolvencies at 0.05%.
Yorkshire and the North East (the regions with the highest insolvency rate in October 2009) saw the biggest improvements with insolvency rates dropping over the last year.
Greater London continues to be the region where businesses had the lowest financial strength score.
The largest companies saw the biggest improvement to the insolvency rate. Mid-sized companies, those with 51-100 or more employees, were the only businesses to see an annual increase, with the insolvency rate, leaping to 0.24% 0.19% in 2009.
Only 10 out of the 35 industries saw an improvement in their financial strength with the leisure and hotel industry leading the rise from 78.76 in October 2009 to 79.29 - the biggest improvement of any sector.
The insolvency rate is calculated by comparing the number of businesses that failed with the total business population in Great Britain.
The financial strength score predicts the likelihood of a business failing in the next 12 months, with 100 being the least likely to default and 1 being the most likely.