East Anglia: Experian reports sharp rise in business failures
THE number of businesses collapsing into insolvency in the East of England rose sharply last month, according to figures from business information group Experian.
A total of 166 business insolvencies were recorded in the region during November, an increase of nearly half (46.9%) compared with the same month last year.
The increase was the second-largest in the country, with only the North West suffering a bigger rise, at 61.6%, although the failure rate of businesses in the East remains in line with the national average.
The failure rate – insolvencies as a percentage of the total number of businesses – rose in the East from 0.06% in November 2010 to 0.09% last month.
It means the region has fallen from joint top place a year ago, alongside London, the South East and the South West, to joint fifth, alongside the East Midlands. Scotland has joined the South East in top place, on 0.07%, with London and the South West in joint third on 0.08%.
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The East has also fallen by one place, from third to fourth, in terms of Experian’s overall “financial strength” rating, based on the likelihood of firms failing in the next 12 months, with the region’s score having fallen from 82.18 to 79.22.
The South West continues to lead the way, with a score of 80.52 against 82.96 a year ago. Nationally, the failure rate has risen from 0.07% a year ago to 0.09% while the average financial strength score has fallen from 81.31 to 78.07.
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Max Firth, managing director of Experian’s business information services division in the UK, said: “The latest insolvency index highlights that some business 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 on-going basis.”