East of England: Business failures in the region down by more than a third in April

THE number of business failures across Britain fell sharply last month compared with April 2011, according to new insolvency figures, with the East of England among the region’s leading the way.

A total of 143 businesses in the East were declared insolvent during April, representing a fall of 34.1% compared with the same month a year earlier.

This was the second biggest fall recorded in the country, bettered only by a 37.9% fall in the North East, figures compiled by business information group Experian show.

Nationally, the number of business insolvencies fell by 13.5%, to 1,564, with only two of the 11 regions and nations seeding an increase – the East Midlands, up 31.1%, and Scotland, up 30.9%.

The failures in the East represented 0.08% of the total business population in the region, placing it joint fourth in the country, alongside the North West and bettered only by the South West, on 0.06%, and Greater London and the South East, both on 0.07%.

All regions and nations saw their “financial strength” rating – an assessment by Experian of the likelihood of a business failing over the next 12 months – improve compared with April last year, with the East’s score hardening from 84.19 to 84.53, ahead of the national average of 83.76.

Max Firth, UK managing firector for Experian’s Business Information Services division, said: “Today’s figures show a more stable business environment, with some areas and sectors that have historically seen the highest rates of business failures moving in the right direction.

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“Since January 2009, when the average financial strength score of UK firms had fallen to its lowest level recorded, there has been a definite and positive upward trend. Combined, these two valuable indicators show how UK businesses are faring and highlight areas where there are opportunities, as well as risks.”

The latest figures also indicate that medium-sized firms, which have struggled the most in recent times, were the most improved during April.

Businesses with 51 to 100 employees saw the biggest improvement in failure rate from 0.22% April 2011 to 0.10% in April 2012, and were also one of the categories to see the biggest month-on-month fall, from 0.20% in March.

Businesseswith 26 to 50 employees saw a similar month-on-month fall, from 0.24% in March to 0.16% in April.

Of the UK’s five biggest sectors – business services, building/construction, property, IT and leisure/hotel – the property sector saw the biggest improvement during April, with the failure rate falling from 0.12% in April last year to 0.06% last month. This was followed by the building and construction sector, down from 0.18% to 0.15%.

The property sector also saw the average financial health of its business population improve the most compared to the other big industries, from 79.43 in April last year to 80.38 last month.