East bucks trend for business failure rate

THE East of England bucked the national trend last month by recording a slight fall in the number of business failures.

Figures compiled by information company Experian show that a total of 137 businesses in the region became insolvent during October, a fall of 2.84% compared with the same month last year and also slightly down on September’s total of 140.

In contrast, business failures across the UK were 12.97% higher last month, compared with October 2010, at 1,847.

Scotland suffered the biggest increase, with a rise of 45.31%, following the East and West Midlands, on 40.22% and 34.97% respectively.

The East was one of five regions to see a decrease, with the biggest falls, of 14.29% and 12.0%, being recorded in Yorkshire and Wales.

The business failure rate (the number of insolvencies as a percentage of the total business population) in the East also out-performed the UK as a whole, remaining unchanged at 0.08% compared with both the previous month and October 2010.

Nationally, the rate for 0.1% last month, with the East having the joint second-lowest failure rate in the country, bettered only by the South West on 0.06%.

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And the East ranked third in the country last month according to Experian’s overall “financial strength” rating, based on an assessment of the risk of a business failing.

The region recorded a score of 79.58, down from 81.90 in October 2010 and 79.91 in September this year, but better than every other part of the UK apart from the South West (with a score of 80.80) and the South East (79.79).

A break-down of the figures according to company size shows larger firms, with more than 500 employees, as having the largest increase in failures last month, 33.33%, in contrast with a 26.7% fall in September.

However, most sizes of company saw an increase of some scale last month, with the only substantial fall, of 25%, being recorded by those employing between 50 and 100 people.

Max Firth, UK and Ireland managing director for business information services at Experian, said: “While 0.1% represents a very small percentage of the UK’s business population failing in October, we are seeking an increase in insolvencies across most sizes of business.

“As a result of this, more than more businesses are now acutely aware of the importance of having a good understanding about the companies they deal with,” he added.