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No increase in UK insolvency rate for 12 months running

London turns corner with first fall since March. The latest Business Insolvency Index from Experian®, the global information services company, reveals that business insolvency rates in August 2013 fell from 0.09 per cent in 2012 to 0.08 per cent in 2013 marking the twelfth month that the rate has remained stable or fallen.

In terms of regional trends, nine of the 11 regions saw their insolvency rate drop year-on-year, with the biggest fall coming from the North East which went from 0.12 per cent last year to 0.09 per cent in August 2013. Even London, which has seen several months of increased insolvency rates, saw a fall from 0.10 per cent to 0.08 per cent – the first since March 2013.

Looking at insolvency rates by company size, the biggest falls were among companies with 51-100 employees, down from 0.19 per cent to 0.14 per cent. Larger businesses didn’t fare as well, having experienced increasing g insolvencies last month, this month the insolvency rate amongst companies with more than 501 employees rose again in August from 0.06 per cent in 2012 to 0.17 per cent this year.

Max Firth, Managing Director, Experian Business Information Services, UK&I said: “We haven’t seen such a prolonged period of stability and improvement in insolvencies for a while and the figures signal an increasingly robust business population, which bodes well for growth. What is particularly significant is the biggest fall coming from 51-100 employee companies. It follows on from a strong year-on-year drop in July and will give more confidence to these mid-sized businesses which suffered the most during the recession.

“When times are good and businesses are looking to grow, safeguarding the supply chain through business monitoring is integral. Businesses need to ensure that they are alerted to any potential issues quickly so sufficient steps can be taken to reduce any potential impact on their business.”

Area statistics

The South West fared particularly well in August, with the lowest insolvency rate of all the regions at 0.05 per cent, representing a drop both year-on-year (0.07) and also since last month (0.07). Yorkshire was the only region to see a slight increase compared to August 2012 (up from 0.08 per cent to 0.09 per cent).  Scotland, which has enjoyed historically low rates for nearly eight months now, saw a rise from last month’s rate of 0.03 per cent to 0.06 per cent.

Sector view

Of the UK’s largest five sectors, the Building & Construction industry again saw a year-on-year fall – from 0.17 per cent to 0.12 per cent – the tenth month in a row it has fallen compared to the previous year. Outside the top five, the insurance industry fared particularly well, with insolvencies down from 0.15 per cent in August 2012 to 0.03 per cent in August this year.

Area InsolvenciesAugust 2013 InsolvenciesAugust 2012 % of business population failing August 2013 % of business population failing  August 2012
Scotland 72             77 0.06% 0.06%
North East 41             52 0.09% 0.12%
North West 201            190 0.09% 0.10%
Yorkshire 118            106 0.09% 0.08%
Wales 48             55 0.08% 0.09%
West Midlands 135            154 0.08% 0.10%
East Midlands 101             97 0.08% 0.09%
Eastern 126            151 0.06% 0.08%
South West 93            112 0.05% 0.07%
London 447            508 0.08% 0.10%
South East 250            221 0.07% 0.07%
Grand Total 1,632         1,723 0.08% 0.09%

 

Source: pH, an Experian company

Employment InsolvenciesAugust 2013 InsolvenciesAugust 2012 % of business population failing August 2013 % of business population failing August 2012
0-2 806 829 0.05% 0.06%
3-5 247            273 0.10% 0.12%
6-10 233            263 0.16% 0.19%
11-25 184            193 0.17% 0.18%
26-50 80             73 0.16% 0.15%
51-100 39             52 0.14% 0.19%
101-500 28             35 0.10% 0.13%
501+ 15               5 0.17% 0.06%
Grand Total 1,632         1,723 0.08% 0.09%

 

Source: pH, an Experian company

Sector InsolvenciesAugust 2013 InsolvenciesAugust 2012 % of business population failing August 2013 % of business population failing August 2012
Extractive Industries 10               1 0.64% 0.07%
Oil 2               2 0.06% 0.07%
Building and Construction 210            293 0.12% 0.17%
Building Materials 4               3 0.11% 0.08%
Chemicals Industry 3              – 0.11% 0.00%
Diversified Industrials 30             36 0.13% 0.17%
Electricals 11             11 0.11% 0.12%
Engineering 51             50 0.12% 0.12%
Printing, Paper and Packaging 5               5 0.15% 0.15%
Textiles and Clothing 21             21 0.13% 0.14%
Breweries 0              – 0.00% 0.00%
Spirits, Wine and Tobacco 0               1 0.00% 0.20%
Food Manufacturing 9               6 0.12% 0.09%
Pharmaceuticals 3               3 0.22% 0.23%
Wholesaling 72             54 0.11% 0.09%
Leisure and Hotels 121            109 0.12% 0.12%
Media 43             51 0.06% 0.08%
Food Retailing 21             14 0.11% 0.08%
Non-Food Retailing 89            115 0.09% 0.13%
Servicing/Repair 4               7 0.05% 0.09%
Transport 66             56 0.11% 0.10%
Utilities 1               4 0.04% 0.14%
Postal and Telecommunications 7               6 0.07% 0.07%
Agriculture, Forestry and Fishing 7               8 0.03% 0.04%
Banking and Financial Services 58             59 0.11% 0.12%
Health and Household 1               1 0.11% 0.12%
Business Services 403            447 0.07% 0.08%
Hiring and Leasing 14             14 0.10% 0.10%
Property 108             95 0.07% 0.06%
Other Services 116            103 0.04% 0.04%
Plastics & Rubber 12             14 0.18% 0.21%
Insurance 4             17 0.03% 0.15%
IT 74             65 0.06% 0.06%
Motor Traders 23             34 0.06% 0.09%
Unspecified 29             18 0.02% 0.01%
Grand Total 1,632         1,723 0.08% 0.09%

Source: pH, an Experian company

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