UK business insolvencies hits lowest rate in January since June 2007

 

News release

Contact:
Natalie Hale 
0115 992 2645/07971 709274
natalie.hale@uk.experian.com

UK business insolvencies hits lowest rate in January since June 2007

Financial strength of businesses improved over two per cent year-on-year

Nottingham, UK, 19 February 2010 — The latest Insolvency Index from Experian®, the global information services company, reveals a positive picture in January, with the rate of business failures falling to its lowest point since June 2007.

Businesses across the UK saw an 2.1 per cent improvement in their combined financial strength score[1], from 79.46 in January 2009 to 81.16 January 2010.  The rate of insolvencies[2] fell to 0.07 per cent in January 2010, with seven in every 10,000 businesses going under. This compares to an insolvency rate of 0.09 per cent in January 2009 and 0.11 per cent in December 2009.

Rolf Hickmann, Managing Director of pH, an Experian company, said: “It’s encouraging to discover that not since the current financial crunch started have so few firms become insolvent in a single month.  Whilst it is too early to predict whether we are fully out of the woods, this does hint at an improvement in the health of UK businesses, something which is reinforced by the financial strength view provided by January’s data.”

Other key highlights include: 

  • As in January 2009, businesses in the South West continued to be the most robust, holding the best financial strength score during January 2010.
  • The North East saw its insolvency rate decrease by over 30 per cent from 0.19 per cent to 0.12 per cent in January, subsequently losing its position as the region with the highest rate.
  • Yorkshire, with 0.13 per cent, witnessed the highest rate of failures in January.
  • Scotland, the only region to see a year-on-year increase in insolvencies, was beaten by Wales to having the lowest rate of business failures in January (0.06 per cent).
  • Businesses in Greater London saw the highest year-on-year improvement in their financial health (from 77.85 to 80.02).  However, they also had the lowest overall financial strength score of any region.
  • The highest insolvency rates during January 2010 were among businesses with 11 to 100 employees (0.19 per cent).
  • 1 to 2 employee firms had the lowest rate of insolvencies (0.04 per cent).
  • The largest businesses, those with over 501 employees, continue to have the best financial strength score (84.22). They were also, however, the only types to see a year-on-year decline, albeit marginal, in the score (down from 84.57).
  • Businesses with 51 to 100 employees hold the worst average financial strength score (80.06), although they did see a small year-on-year improvement (from 79.92).
  • Breweries (0.42 per cent) and plastics and rubber companies (0.26 per cent) saw the highest insolvency rates in January 2010, although these are based on a handful of firms failing within small sectors. With 335 insolvencies the Business Services sector saw the highest volume of failures, although this represented just 0.06 per cent of its population.

 

Region

Insolvencies Jan 10

% change from Jan 09

% of business population failing Jan 10

% of business population failing Jan 09

Financial Strength

Score Jan 10

Financial Strength

Score Jan 09

Scotland

 77

20.3

0.07%

0.06%

 81.12

 80.37

North East

 49

-15.5

0.12%

0.15%

 81.24

 79.31

North West

 135

-37.5

0.07%

0.12%

 80.45

 78.88

Yorkshire

 156

-20.4

0.13%

0.15%

 81.24

 79.20

Wales

 32

-34.7

0.06%

0.09%

 80.74

 79.09

West Midlands

 121

-37.3

0.08%

0.12%

 80.07

 78.51

East Midlands

 84

-31.1

0.08%

0.11%

 81.59

 79.68

Eastern

 115

-32.7

0.07%

0.10%

 82.20

 80.70

South West

 103

-18.3

0.07%

0.08%

 82.68

 81.42

Greater London

 332

-18.6

0.07%

0.08%

 80.02

 77.85

South East

 214

-18.6

0.07%

0.07%

 82.42

 80.82

Grand Total

 1,418

-24.0

0.07%

0.09%

 81.16

 79.46

Source: pH, an Experian company

 

Number of employees

Insolvencies Jan 10

% change from Jan 09

% of business population failing Jan 10

% of business population failing Jan 09

Financial Strength

Score Jan 10

Financial Strength

Score Jan 09

1-2

 175

-11.6

0.04%

0.05%

 82.44

 80.29

3-5

 225

-23.5

0.10%

0.12%

 82.04

 81.46

6-10

 205

-26.3

0.16%

0.21%

 81.39

 80.68

11-25

 195

-29.1

0.19%

0.26%

 80.99

 80.70

26-50

 90

-23.7

0.19%

0.24%

 80.53

 80.40

51-100

 51

-38.6

0.19%

0.30%

 80.06

 79.92

101-500

 41

-34.9

0.15%

0.23%

 81.14

 81.10

501+

 12

-33.3

0.13%

0.19%

 84.22

 84.57

Unspecified

 424

-21.3

0.05%

0.05%

 80.42

 78.21

Grand Total

 1,418

-24.0

0.07%

0.09%

 81.16

 79.46

Source: pH, an Experian company

 

Sector

Insolvencies Jan 10

% change from Jan 09

% of business population failing Jan 10

% of business population failing Jan 09

Financial Strength

Score Jan 10

Financial Strength

Score Jan 09

Extractive Industries

 -  

-

0.00%

0.00%

 82.78

 81.94

Oil

 1

-66.7

0.03%

0.09%

 86.35

 84.52

Building and Construction

 217

-27.2

0.13%

0.19%

 78.02

 77.35

Building Materials

 9

50.0

0.24%

0.16%

 79.56

 79.57

Chemicals Industry

 3

-25.0

0.11%

0.13%

 81.36

 80.89

Diversified Industrials

 45

-27.4

0.21%

0.27%

 78.16

 77.71

Electricals

 14

16.7

0.16%

0.13%

 79.37

 78.97

Engineering

 62

6.9

0.16%

0.15%

 79.31

 78.97

Printing, Paper and Packaging

 5

-16.7

0.20%

0.23%

 78.24

 78.25

Textiles and Clothing

 24

-17.2

0.18%

0.20%

 76.81

 75.96

Breweries

 2

0.0

0.42%

0.41%

 79.96

 79.66

Spirits, Wine and Tobacco

 -  

-

0.00%

0.00%

 82.27

 81.62

Food Manufacturing

 6

-60.0

0.12%

0.30%

 77.80

 77.50

Pharmaceuticals

 1

0.0

0.11%

0.11%

 81.43

 81.96

Wholesaling

 65

-22.6

0.10%

0.12%

 79.85

 79.18

Leisure and Hotels

 92

-29.8

0.11%

0.16%

 79.02

 76.41

Media

 52

-16.1

0.08%

0.09%

 80.89

 79.27

Food Retailing

 16

6.7

0.11%

0.11%

 76.85

 77.48

Non-Food Retailing

 92

-33.8

0.11%

0.16%

 79.07

 78.05

Servicing/Repair

 4

-60.0

0.05%

0.11%

 82.30

 80.26

Transport

 57

-23.0

0.11%

0.13%

 78.42

 76.78

Utilities

 -  

-

0.00%

0.00%

 80.52

 79.72

Postal and Telecommunications

 9

50.0

0.10%

0.07%

 76.30

 74.36

Agriculture, Forestry and Fishing

 8

-27.3

0.04%

0.05%

 85.38

 83.85

Banking and Financial Services

 49

-15.5

0.10%

0.12%

 84.60

 84.30

Health and Household

 -  

-100.0

0.00%

0.11%

 79.48

 78.66

Business Services

 335

-12.8

0.06%

0.07%

 81.61

 79.47

Hiring and Leasing

 12

-36.8

0.09%

0.14%

 81.29

 78.93

Property

 67

-49.6

0.04%

0.08%

 83.48

 84.76

Other Services

 61

-22.8

0.03%

0.05%

 85.67

 83.77

Plastics & Rubber

 15

-11.8

0.26%

0.29%

 78.02

 78.03

Insurance

 3

-62.5

0.03%

0.07%

 84.73

 84.88

IT

 53

-1.9

0.05%

0.05%

 83.60

 80.00

Motor Traders

 27

-44.9

0.08%

0.14%

 79.91

 78.68

Unspecified

 12

-66.7

0.01%

0.02%

 74.03

 68.15

Grand total

 1,418

-24.0

0.07%

0.09%

 81.16

 79.46

Source: pH, an Experian company

 

ENDS

 


[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.

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