Contact:
Serj Heera
PR Manager, Business Information and Automotive
+44 (0) 115 992 2773 Tel
serjeet.heera@uk.experian.com Email
UK’S BUSINESS COMMUNITY SEES THE BIGGEST IMPROVEMENT IN FINANCIAL STRENGTH SINCE JULY 2008
Nottingham, UK, 23 November 2009 - The Insolvency Index from Experian®, the global information services company, today revealed that while the average business insolvency rate[1] increased slightly in October, the UK’s business community as a whole is now at its strongest financially since July 2008.
The average financial strength score[2] of active businesses reached 81.14 during October, up from 79.80 in October 2008. This indicates that businesses on the whole are in a stronger financial position than previously with a smaller chance of failure in the next 12 months.
The business insolvency rate rose from 0.09 per cent in September this year to 0.10 per cent in October, with 10 businesses in every 10,000 going under. This represents a slight improvement on October 2008, when the insolvency rate was at 0.11 per cent.
Furthermore, the smallest businesses (with 1 to 2 employees) remained the most resilient, with only 0.06 per cent of the business population failing during October. Businesses falling into this ‘micro’ category also demonstrated the highest improvement in their financial strength score during October, up to 82.22. This compares with 81.90 in September 2009 and 80.85 in October 2008.
Rolf Hickman, Managing Director of pH, an Experian company, said: “Throughout 2008, the average financial strength score had been seeing a downward trend, but 2009 has seen a reversal. The financial solidity of UK businesses has been improving over the year.
“This has impacted on the insolvency rate, which has remained fairly stable since July, with a slight increase in October. If the financial strength of businesses continues to improve, we could see insolvencies maintain a low level and even start to fall.”
Other highlights in October include:
|
Region |
Insolvencies Oct 09 |
% change from Oct 08 |
% of business population failing Oct 09 |
% of business population failing Oct 08 |
Financial Strength Score Oct 09 |
Financial Strength Score Oct 08 |
|
Scotland |
67 |
-8.2 |
0.06% |
0.07% |
81.11 |
80.52 |
|
North East |
54 |
-28.9 |
0.13% |
0.20% |
81.12 |
79.74 |
|
North West |
239 |
-6.6 |
0.12% |
0.14% |
80.55 |
78.97 |
|
Yorkshire |
179 |
-12.7 |
0.15% |
0.16% |
81.25 |
79.59 |
|
Wales |
57 |
-13.6 |
0.10% |
0.12% |
80.60 |
79.45 |
|
West Midlands |
205 |
1.0 |
0.13% |
0.13% |
80.03 |
78.90 |
|
East Midlands |
113 |
-18.1 |
0.11% |
0.13% |
81.53 |
80.09 |
|
Eastern |
154 |
7.7 |
0.09% |
0.09% |
82.18 |
81.04 |
|
South West |
113 |
-30.7 |
0.07% |
0.11% |
82.55 |
81.70 |
|
Greater London |
500 |
2.2 |
0.10% |
0.10% |
79.98 |
78.34 |
|
South East |
286 |
-10.6 |
0.09% |
0.09% |
82.43 |
81.12 |
|
Unspecified |
|
|
|
|
|
|
|
Grand Total |
1,967 |
-7.7 |
0.10% |
0.11% |
81.14 |
79.80 |
Source: pH, an Experian company
|
Number of employees |
Insolvencies Oct 09 |
% change from Oct 08 |
% of business population failing Oct 09 |
% of business population failing Oct 08 |
Financial Strength Score Oct 09 |
Financial Strength Score Oct 08 |
|
1-2 |
249 |
0.0 |
0.06% |
0.07% |
82.22 |
80.85 |
|
3-5 |
312 |
-1.9 |
0.14% |
0.13% |
82.08 |
81.70 |
|
6-10 |
284 |
0.0 |
0.22% |
0.21% |
81.57 |
80.95 |
|
11-25 |
290 |
12.4 |
0.28% |
0.24% |
81.27 |
80.91 |
|
26-50 |
136 |
7.1 |
0.28% |
0.26% |
80.83 |
80.63 |
|
51-100 |
53 |
-24.3 |
0.20% |
0.25% |
80.42 |
80.12 |
|
101-500 |
57 |
-27.8 |
0.22% |
0.29% |
81.54 |
81.27 |
|
501+ |
15 |
-6.3 |
0.16% |
0.17% |
84.67 |
84.92 |
|
Unspecified |
571 |
-21.9 |
0.06% |
0.08% |
80.37 |
78.51 |
|
Grand Total |
1,967 |
-7.7 |
0.10% |
0.11% |
81.14 |
79.80 |
Source: pH, an Experian company
|
Sector |
Insolvencies Oct 09 |
% change from Oct 08 |
% of business population failing Oct 09 |
% of business population failing Oct 08 |
Financial Strength Score Oct 09 |
Financial Strength Score Oct 08 |
|
Extractive Industries |
3 |
200.0 |
0.20% |
0.07% |
82.89 |
82.07 |
|
Oil |
5 |
-37.5 |
0.15% |
0.25% |
86.24 |
84.71 |
|
Building and Construction |
288 |
-4.3 |
0.18% |
0.19% |
78.14 |
77.69 |
|
Building Materials |
11 |
83.3 |
0.29% |
0.16% |
79.95 |
79.84 |
|
Chemicals Industry |
6 |
50.0 |
0.21% |
0.14% |
81.72 |
81.02 |
|
Diversified Industrials |
51 |
-1.9 |
0.23% |
0.23% |
78.46 |
77.89 |
|
Electricals |
14 |
40.0 |
0.16% |
0.11% |
79.77 |
79.14 |
|
Engineering |
97 |
26.0 |
0.25% |
0.20% |
79.74 |
79.17 |
|
Printing, Paper and Packaging |
4 |
-42.9 |
0.16% |
0.27% |
78.85 |
78.42 |
|
Textiles and Clothing |
22 |
-40.5 |
0.16% |
0.25% |
77.24 |
76.18 |
|
Breweries |
1 |
-50.0 |
0.21% |
0.41% |
80.28 |
79.81 |
|
Spirits, Wine and Tobacco |
1 |
#DIV/0! |
0.20% |
0.00% |
82.24 |
81.79 |
|
Food Manufacturing |
15 |
0.0 |
0.30% |
0.30% |
78.28 |
77.82 |
|
Pharmaceuticals |
2 |
100.0 |
0.22% |
0.11% |
81.81 |
82.05 |
|
Wholesaling |
118 |
2.6 |
0.18% |
0.17% |
80.16 |
79.44 |
|
Leisure and Hotels |
142 |
19.3 |
0.17% |
0.14% |
78.76 |
76.90 |
|
Media |
70 |
14.8 |
0.11% |
0.09% |
80.91 |
79.46 |
|
Food Retailing |
13 |
-18.8 |
0.09% |
0.12% |
77.60 |
77.96 |
|
Non-Food Retailing |
106 |
-16.5 |
0.12% |
0.15% |
79.34 |
78.44 |
|
Servicing/Repair |
13 |
8.3 |
0.15% |
0.14% |
82.10 |
80.68 |
|
Transport |
68 |
-6.8 |
0.13% |
0.13% |
78.36 |
77.30 |
|
Utilities |
1 |
0.0 |
0.05% |
0.06% |
80.91 |
79.99 |
|
Postal and Telecommunications |
11 |
-35.3 |
0.12% |
0.19% |
76.47 |
74.57 |
|
Agriculture, Forestry and Fishing |
11 |
0.0 |
0.05% |
0.05% |
85.28 |
84.16 |
|
Banking and Financial Services |
94 |
8.0 |
0.19% |
0.18% |
84.97 |
84.49 |
|
Health and Household |
2 |
100.0 |
0.23% |
0.11% |
79.93 |
78.74 |
|
Business Services |
409 |
-5.5 |
0.07% |
0.08% |
81.49 |
79.76 |
|
Hiring and Leasing |
21 |
-16.0 |
0.16% |
0.19% |
81.03 |
79.36 |
|
Property |
112 |
-41.7 |
0.06% |
0.11% |
83.83 |
84.90 |
|
Other Services |
89 |
21.9 |
0.05% |
0.04% |
85.51 |
84.13 |
|
Plastics & Rubber |
13 |
-48.0 |
0.23% |
0.43% |
78.52 |
78.23 |
|
Insurance |
17 |
6.3 |
0.14% |
0.13% |
85.14 |
85.02 |
|
IT |
77 |
-2.5 |
0.07% |
0.08% |
83.35 |
79.74 |
|
Motor Traders |
43 |
-52.2 |
0.12% |
0.26% |
79.94 |
79.03 |
|
Unspecified |
17 |
-55.3 |
0.01% |
0.03% |
73.00 |
68.96 |
|
Grand total |
1,967 |
-7.7 |
0.10% |
0.11% |
81.14 |
79.80 |
Source: pH, an Experian company
[1] The insolvency rate is calculated by comparing the number of businesses that failed with the total business population in Great Britain.
[2] 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.