Business strength improves and insolvencies fall in November, according to Experian

Contact:
Serj Heera
PR Manager, Business Information and Automotive
+44 (0) 115 992 2773 Tel
serjeet.heera@uk.experian.com Email

 

BUSINESS strength improves AND insolvencies
fall IN NOVEMBER, according to Experian

 

Smallest businesses show the most resilience

 

Nottingham, UK, 21 December 2009 - The latest Insolvency Index from Experian®, the global information services company, has revealed a positive picture in November, as the number of failing businesses continued to fall and the financial strength of businesses improved.

 

Businesses across Great Britain saw an improvement in their financial strength score[1] from 79.66 in November 2008 to 81.26 November 2009.  Furthermore, the rate of insolvencies[2] fell to 0.09 per cent in November 2009, compared to 0.11 per cent in November 2008.

 

Rolf Hickmann, Managing Director of pH, an Experian company, said: “The last four months have seen a fairly low and stable rate of insolvencies, compared to 2008, and certainly compared to the heights reached in the last recession in 1992.  In fact the overall picture shows a very gentle decline in insolvencies throughout the year.  Furthermore, the latest improvement in the financial health score is the fifth month in a row that the health of businesses has improved.

 

“Despite the prolonged recession, the UK’s entrepreneurial spirit continues to thrive.  The number of micro businesses, those with one to two employees, is growing rapidly.  They are enjoying amongst the lowest rates of insolvency and are relatively secure.”

 

Other key highlights include:

 

  • As in November 2008, businesses in the South West continued to be the most robust, holding the best financial strength score during November 2009.
  • Although insolvency rates in the South East region fell from 0.16 per cent (November 2008) to 0.13 per cent (November 2009), it continues to have the highest rate of failures compared to other regions
  • Scotland continues to enjoy the lowest rate of business failures (0.04 per cent).
  • The financial strength of businesses in Yorkshire improved the most during November (from a financial strength score of 79.39 to 81.40). Yorkshire was also amongst the regions to have the lowest rates of failure
  • Businesses in Greater London saw the second highest improvement in their financial health (from 78.13 to 80.13).  However, London businesses had the lowest overall financial strength score compared to other regions.
  • As in November 2008, the highest insolvency rates during November 2009 continued to be among businesses with 11 to 25 employees (0.24 per cent).
  • The smallest rates of insolvencies remained among the smallest businesses – 1 to 2 employees (0.05 per cent).
  • The largest businesses, with over 501 employees, continue to have the best financial strength score, but were the only types to see a drop, albeit marginal, in the score (down from 84.83 to 84.61).
  • The worst score in comparison to the other businesses was held by businesses with 51 to 100 employees (80.40), although they did see a small year-on-year improvement (from 80.10).
  • The best improvement in the financial strength score from November 2008 to November 2009 was among businesses with 1 to 2 employees.  These businesses also held the second highest score, after businesses with 501 employees.
  • The chemical and breweries sectors had the highest insolvencies rates during November (0.21 per cent each), followed closely by the postal/telecommunications sector (0.20 per cent). 
  • Although the postal/telecommunications sector continues to hold the worst financial strength score compared to other sectors (76.59), it was among the top three sectors to see the highest improvement in its scores since November 2008 (from 74.46).

 

Region

Insolvencies Nov 09

% change from Nov 08

% of business population failing Nov 09

% of business population failing Nov 08

Financial Strength

Score Nov 09

Financial Strength

Score Nov 08

Scotland

               49

-38.8

0.04%

0.07%

     81.23

     80.47

North East

               51

-17.7

0.13%

0.16%

     81.26

     79.58

North West

             198

-22.0

0.10%

0.14%

     80.47

     79.03

Yorkshire

             150

-11.2

0.13%

0.13%

     81.40

     79.39

Wales

               45

-26.2

0.08%

0.11%

     80.77

     79.27

West Midlands

             167

-11.2

0.11%

0.12%

     80.17

     78.73

East Midlands

             104

-20.6

0.10%

0.12%

     81.70

     79.94

Eastern

             140

-29.3

0.08%

0.12%

     82.30

     80.89

South West

             105

-23.4

0.07%

0.09%

     82.70

     81.58

Greater London

             431

-11.3

0.09%

0.10%

     80.13

     78.13

South East

             194

-34.2

0.06%

0.08%

     82.55

     80.99

Grand Total

          1,634

-20.7

0.09%

0.11%

     81.26

     79.66

Source: pH, an Experian company

 

Number of employees

Insolvencies Nov 09

% change from Nov 08

% of business population failing Nov 09

% of business population failing Nov 08

Financial Strength

Score Nov 09

Financial Strength

Score Nov 08

1-2

             200

-21.9

0.05%

0.07%

     82.38

     80.69

3-5

             266

-18.9

0.12%

0.14%

     82.17

     81.60

6-10

             237

-19.7

0.18%

0.22%

     81.63

     80.85

11-25

             244

-13.2

0.24%

0.27%

     81.34

     80.86

26-50

             103

-18.3

0.22%

0.26%

     80.85

     80.55

51-100

               48

-23.8

0.18%

0.23%

     80.40

     80.10

101-500

               43

-27.1

0.16%

0.22%

     81.55

     81.27

501+

               12

9.1

0.13%

0.12%

     84.61

     84.83

Unspecified

             481

-25.1

0.05%

0.07%

     80.50

     78.36

Grand Total

          1,634

-20.7

0.09%

0.11%

     81.26

     79.66

Source: pH, an Experian company

 

Sector

Insolvencies Nov 09

% change from Nov 08

% of business population failing Nov 09

% of business population failing Nov 08

Financial Strength

Score Nov 09

Financial Strength

Score Nov 08

Extractive Industries

                 -  

-100.0

0.00%

0.20%

     82.92

     82.11

Oil

                 3

200.0

0.09%

0.03%

     86.34

     84.72

Building and Construction

             246

-14.9

0.15%

0.18%

     78.26

     77.56

Building Materials

                 7

133.3

0.18%

0.08%

     79.91

     79.61

Chemicals Industry

                 6

0.0

0.21%

0.20%

     81.78

     81.00

Diversified Industrials

               34

-38.2

0.16%

0.24%

     78.61

     77.82

Electricals

               10

-9.1

0.11%

0.12%

     79.82

     79.04

Engineering

               66

13.8

0.17%

0.15%

     79.78

     79.11

Printing, Paper and Packaging

                 3

0.0

0.12%

0.12%

     78.78

     78.31

Textiles and Clothing

               26

-27.8

0.19%

0.25%

     77.30

     76.08

Breweries

                 1

0.0

0.21%

0.21%

     80.36

     79.90

Spirits, Wine and Tobacco

                 -  

-100.0

0.00%

0.40%

     82.35

     81.98

Food Manufacturing

                 6

-14.3

0.12%

0.14%

     78.30

     77.68

Pharmaceuticals

                 1

-50.0

0.11%

0.22%

     81.63

     82.08

Wholesaling

               96

-22.0

0.15%

0.18%

     80.24

     79.36

Leisure and Hotels

             105

-22.8

0.13%

0.16%

     78.98

     76.72

Media

               53

-24.3

0.08%

0.11%

     81.02

     79.35

Food Retailing

               17

70.0

0.12%

0.07%

     77.66

     77.77

Non-Food Retailing

               78

-34.5

0.09%

0.14%

     79.39

     78.27

Servicing/Repair

               15

50.0

0.17%

0.11%

     82.25

     80.54

Transport

               61

-7.6

0.12%

0.12%

     78.53

     77.15

Utilities

                 3

50.0

0.16%

0.11%

     80.89

     79.91

Postal and Telecommunications

               17

-26.1

0.20%

0.25%

     76.59

     74.46

Agriculture, Forestry and Fishing

               12

71.4

0.06%

0.03%

     85.34

     84.06

Banking and Financial Services

               52

-27.8

0.10%

0.15%

     85.01

     84.44

Health and Household

                 -  

-100.0

0.00%

0.34%

     79.93

     78.61

Business Services

             362

-17.4

0.07%

0.08%

     81.59

     79.62

Hiring and Leasing

               12

-71.4

0.09%

0.31%

     81.23

     79.18

Property

               98

-45.3

0.06%

0.10%

     83.89

     84.85

Other Services

               81

-30.2

0.05%

0.07%

     85.64

     83.98

Plastics & Rubber

                 9

-40.0

0.16%

0.26%

     78.57

     78.16

Insurance

               15

-11.8

0.13%

0.14%

     85.20

     84.98

IT

               63

-11.3

0.06%

0.07%

     83.51

     80.05

Motor Traders

               51

13.3

0.15%

0.13%

     80.07

     78.91

Unspecified

               25

25.0

0.02%

0.01%

     73.39

     68.49

Grand total

          1,634

-20.7

0.09%

0.11%

     81.26

     79.66

Source: pH, an Experian company


[1] 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.

[2] The insolvency rate is calculated by comparing the number of businesses that failed with the total business population in Great Britain.

  • Contact Information

  • 2 Cumberland Place
    Fenian Street
    Dublin 2
    D02 HY05
    Ireland

Top