news release

2011 saw business insolvencies in the UK increase by a small margin

Nottingham, 25 January 2012 – The Insolvency Index from Experian^®, the global information services company, today revealed that the insolvency rate[1] for 2011 rose only slightly compared to 2010.

21,070 UK businesses, 1.1 per cent of the total business population, failed in 2011. This represented a marginal increase on the 1.03 per cent (19,818 failures) recorded in 2010.  In 2008 and 2009, the insolvency rates were considerably higher, reaching 1.16 per cent and 1.25 per cent respectively. 

Experian’s analysis also shows that during the second half of 2011 the insolvency rate neither rose nor fell significantly - from a rate of 0.53 per cent (H1) to 0.56 per cent (H2). 

Max Firth, UK Managing Director for Experian’s Business Information Services division, said: “Given the challenging economic climate in 2011, businesses in the UK were pretty resilient and this was reflected by the stable insolvency rate during the year.  

“For businesses to improve their financial health and avoid insolvency, it is vital that they understand the risks they are exposed to and have strategies in place to protect themselves.  By monitoring the performance of all current and potential clients, they can fully understand and prepare for the impact they could have on them if they failed.” 

Yorkshire sees insolvency rate fall

Yorkshire was the only region to see an improvement from 1.46 per cent (1,724 companies) in 2010 to 1.39 per cent (1,653) in 2011.  This is the second successive year the region has seen the insolvency rate fall.   

Wales witnessed the biggest increase in its insolvency rate, jumping from 1.01 per cent (569 companies) in 2010 to 1.18 per cent (654) in 2011. Scotland, which has experienced significantly lower levels of insolvencies compared to other regions since 2005, came more into line with the rest of the UK with an insolvency rate of 0.93 per cent. 

The UK’s biggest sectors

Of the UK’s biggest sectors - business services, building/construction, property, IT and leisure/hotels – the property sector saw the largest increase in its insolvency rate, from 0.72 per cent in 2010 to 0.91 per cent in 2011.  1,149 property companies failed in 2010, compared to 1,345 in 2011.  

SMEs

Firms with one or two employees saw the biggest increase in the insolvency rate during 2011 – from 0.63 per cent in 2010 to 0.71 per cent.  Despite this increase, they still managed to maintain the lowest rate of insolvencies compared to their larger counterparts.

Region	Insolvencies 2011	% change from 2010	% of business population failing 2011	% of business population failing 2010	Financial Strength Score 2011	Financial Strength Score 2010
Scotland	1,072	9.6	0.93	0.84	82.35	80.91
North East	611	5.2	1.51	1.44	83.36	81.18
North West	2,539	7.1	1.35	1.25	82.56	80.44
Yorkshire	1,653	-4.1	1.39	1.46	83.13	81.09
Wales	654	14.9	1.18	1.01	82.63	80.62
West Midlands	1,994	6.3	1.31	1.20	82.44	80.03
East Midlands	1,262	4.0	1.17	1.12	83.74	81.39
Eastern	1,819	9.4	1.02	0.95	83.72	81.97
South West	1,361	0.2	0.88	0.87	84.32	82.67
Greater London	4,991	7.3	1.03	0.95	81.47	79.85
South East	3,114	9.9	0.97	0.88	83.76	82.24
Grand Total	21,070	6.3	1.10	1.03	82.84	81.03

Source: pH, an Experian company

 

Number of employees	Insolvencies 2011	% change from 2010	% of business population failing 2011	% of business population failing 2010	Financial Strength Score 2011	Financial Strength Score 2010
1-2	3,125	12.1	0.71	0.63	83.85	82.25
3-5	3,268	3.4	1.46	1.44	83.77	81.88
6-10	2,839	1.5	2.14	2.14	83.67	81.40
11-25	2,666	-0.4	2.60	2.62	83.56	81.06
26-50	1,241	0.7	2.60	2.58	83.46	80.89
51-100	612	-1.8	2.22	2.30	84.00	80.61
101-500	469	-0.8	1.76	1.78	84.51	81.76
501+	133	-8.9	1.46	1.56	85.80	84.42
Grand Total	21,070	6.3	1.10	1.03	82.84	81.03

Source: pH, an Experian company

 

 

Sector	Insolvencies 2011	% change from 2010	% of business population failing 2011	% of business population failing 2010	Financial Strength Score 2011	Financial Strength Score 2010
Extractive Industries	18	5.9	1.27	1.16	82.71	82.59
Oil	30	42.9	1.08	0.70	85.24	85.88
Building & Construction	3,275	0.4	2.01	1.97	81.15	77.64
Building Materials	72	-8.9	1.96	2.09	82.89	79.66
Chemicals Industry	35	-31.4	1.31	1.84	84.13	81.57
Diversified Industrials	459	-2.1	2.19	2.17	82.51	77.95
Electricals	145	0.7	1.61	1.62	82.91	79.24
Engineering	674	-10.7	1.71	1.92	83.35	79.32
Printing, Paper & Packaging	51	4.1	1.57	1.69	83.34	78.40
Textiles & Clothing	265	-0.4	1.83	1.88	80.85	76.56
Breweries	7	0.0	1.48	1.47	83.66	79.64
Spirits, Wine & Tobacco	1	-66.7	0.22	0.62	84.43	82.40
Food Manufacturing	109	18.5	1.66	1.55	82.20	77.85
Pharmaceuticals	17	0.0	1.33	1.50	84.26	81.61
Wholesaling	931	-3.4	1.53	1.53	82.54	79.74
Leisure & Hotels	1,586	10.5	1.82	1.69	81.73	79.18
Media	578	-18.8	0.93	1.11	82.90	80.65
Food Retailing	196	7.7	1.23	1.20	81.46	75.99
Non-Food Retailing	1,251	14.1	1.49	1.29	82.43	78.85
Servicing / Repair	89	-11.0	1.17	1.22	84.85	82.22
Transport	726	5.5	1.39	1.33	82.28	78.40
Utilities	20	33.3	0.84	0.71	83.07	79.82
Postal & Telecommunications	125	-4.6	1.52	1.53	80.72	76.25
Agriculture, Forestry & Fishing	107	9.2	0.51	0.46	86.68	85.13
Banking & Financial Services	771	2.9	1.53	1.45	84.63	84.16
Health & Household	5	25.0	0.59	0.46	82.19	79.21
Business Services	4,985	12.1	0.94	0.83	83.14	81.45
Hiring & Leasing	251	2.9	1.87	1.81	82.91	81.42
Property	1,345	17.1	0.91	0.72	80.35	82.70
Other Services	1,189	20.2	0.54	0.48	85.96	85.79
Plastics & Rubber	153	7.0	2.30	2.27	82.34	77.99
Insurance	139	21.9	1.22	0.98	85.27	84.28
IT	688	-2.8	0.65	0.65	83.97	83.49
Motor Traders	476	19.0	1.35	1.13	83.33	79.99
Grand total	21,070	6.3	1.10	1.03	82.84	81.03

Source: pH, an Experian company

ENDS

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