news release

 

Business insolvencies fall according to latest data from Experian

Financial strength of UK firms improves

Nottingham, 27 February 2012 – Experian®, the global information services company, today revealed that the rate of insolvencies fell from 0.11 per cent in December 2011 to 0.07 per cent in January this year – the same rate as in January 2011.

The fall in the UK’s insolvency rate was led by businesses with 101 to 500 employees.  Failure rates amongst these mid-sized businesses fell from 0.21 per cent in December to 0.10 per cent in January. 

Experian’s latest Business Insolvency Index also highlighted an improvement in the financial health among businesses - from 83.73 in December to 84.01 in January.

While most business segments experienced comparable insolvency rates to those seen twelve months ago, the insolvency rate of firms with more than 501 employees reached 0.20 per cent in January, up from 0.07 per cent the year before. 

Max Firth, UK Managing Director for Experian’s Business Information Services division, said: “The fall in the overall rate of insolvencies has taken it back down to the level it was at a year ago, which is certainly positive.  January generally tends to be a good month, with many businesses benefiting from the Christmas trade.  When coupled with steady improvements in the underlying financial strength of businesses, it means that we can entertain some cautious optimism for the months ahead.

“The latest data has, however, revealed an increase in the rate of insolvencies for the largest firms.  This highlights that despite a positive start to 2012, businesses of all sizes still need to understand the risks they are exposed to and have strategies in place to protect themselves.”

Regional differences

Regionally, firms in Yorkshire led the way with the biggest improvements – from an insolvency rate of 0.15 per cent in December to 0.09 per cent in January.  This was followed by London and the South East, from 0.10 per and 0.11 per cent to 0.05 per cent.

The SME view

The insolvency rate improved marginally among micro businesses (one to two employees), but these businesses have continued to maintain the lowest insolvency rate overall.  They also led the month-on-month increase in financial strength, from 84.74 in December to 85.03 in January. 

The year-on-year improvement in financial strength, however, was led by firms with 51 to 100 employees, from 81.62 in January in 2011 to 85.57 in January 2012.  This was followed closely by businesses with 11 to 25 employees followed by 26 to 50 employees – two of the groups that tend to struggle the most.

The UK’s biggest industries

Of the five largest industries in the UK – business services, building/construction, property, IT and leisure/hotels - property saw the biggest fall in its insolvency rate from 0.09 per cent in December to 0.04 per cent in January.  It was also the only one of the big five to see a year-on-year fall – from 0.05 per cent in January 2011.

Businesses within the building/construction sector saw by far the biggest improvements in financial strength – from 77.98 in January 2011 to 82.91.

 


Region

Insolvencies
Jan-12

% change from
Jan-11

% of business population failing
Jan-12

% of business population failing
Jan-11

Financial Strength Score
Jan-12

Financial Strength Score
Jan-11

Scotland

            82

18.8

0.07%

0.06%

     83.78

     81.39

North East

            44

4.8

0.11%

0.11%

     84.77

     81.69

North West

          168

-7.7

0.09%

0.10%

     83.85

     80.92

Yorkshire

          106

43.2

0.09%

0.06%

     84.41

     81.45

Wales

            42

-16.0

0.07%

0.09%

     83.94

     81.09

West Midlands

          140

15.7

0.09%

0.08%

     83.80

     80.69

East Midlands

          114

52.0

0.10%

0.07%

     85.16

     81.80

Eastern

          124

29.2

0.07%

0.05%

     84.74

     82.36

South West

          108

18.7

0.07%

0.06%

     85.42

     83.10

Greater London

          267

-11.6

0.05%

0.06%

     82.47

     80.37

South East

          181

9.7

0.06%

0.05%

     84.86

     82.63

Grand Total

       1,376

8.6

0.07%

0.07%

     84.01

     81.49

Source: pH, an Experian company 

 

Number of employees

Insolvencies
Jan-12

% change from
Jan-11

% of business population failing
Jan-12

% of business population failing
Jan-11

Financial Strength Score
Jan-12

Financial Strength Score
Jan-11

1-2

          223

2.8

0.05%

0.05%

     85.03

     82.67

3-5

          191

-1.0

0.08%

0.09%

     85.05

     82.07

6-10

          193

26.1

0.14%

0.12%

     84.97

     81.80

11-25

          176

2.3

0.17%

0.17%

     84.96

     81.56

26-50

            96

23.1

0.20%

0.16%

     84.85

     81.52

51-100

            38

-7.3

0.14%

0.15%

     85.57

     81.62

101-500

            28

-9.7

0.10%

0.12%

     85.90

     82.72

501+

            18

200.0

0.20%

0.07%

     86.87

     84.94

Grand Total

       1,376

8.6

0.07%

0.07%

     84.01

     81.49

Source: pH, an Experian company

 

Sector

Insolvencies
Jan-12

% change from
Jan-11

% of business population failing
Jan-12

% of business population failing
Jan-11

Financial Strength Score
Jan-12

Financial Strength Score
Jan-11

Extractive Industries

              1

0.0

0.07%

0.07%

     82.85

     83.00

Oil

            -  

-

0.00%

0.00%

     86.16

     85.98

Building & Construction

          215

5.4

0.13%

0.13%

     82.91

     77.98

Building Materials

              4

-

0.11%

0.00%

     84.25

     80.20

Chemicals Industry

              3

-57.1

0.11%

0.26%

     85.67

     81.87

Diversified Industrials

            30

0.0

0.14%

0.14%

     84.55

     78.31

Electricals

              9

0.0

0.10%

0.10%

     84.80

     79.61

Engineering

            40

14.3

0.10%

0.09%

     85.38

     79.69

Printing, Paper & Packaging

              1

-80.0

0.03%

0.16%

     85.67

     79.23

Textiles & Clothing

            11

-21.4

0.08%

0.10%

     82.93

     76.87

Breweries

            -  

-100.0

0.00%

0.21%

     86.17

     79.38

Spirits, Wine & Tobacco

            -  

-

0.00%

0.00%

     85.79

     82.74

Food Manufacturing

              9

50.0

0.13%

0.09%

     84.09

     78.41

Pharmaceuticals

            -  

-100.0

0.00%

0.16%

     85.41

     82.19

Wholesaling

            52

-13.3

0.08%

0.10%

     84.08

     80.10

Leisure & Hotels

          118

18.0

0.13%

0.12%

     82.96

     79.90

Media

            40

33.3

0.06%

0.05%

     84.24

     80.95

Food Retailing

            12

9.1

0.07%

0.07%

     84.00

     75.82

Non-Food Retailing

          104

46.5

0.12%

0.09%

     84.16

     79.13

Servicing / Repair

              9

12.5

0.12%

0.11%

     86.22

     82.82

Transport

            64

-1.5

0.12%

0.13%

     84.04

     78.95

Utilities

              1

-

0.04%

0.00%

     84.97

     79.79

Postal & Telecommunications

              9

-18.2

0.11%

0.14%

     82.70

     76.75

Agriculture, Forestry & Fishing

            10

66.7

0.05%

0.03%

     87.94

     85.40

Banking & Financial Services

            35

-10.3

0.07%

0.08%

     85.64

     84.09

Health & Household

              2

100.0

0.24%

0.12%

     83.64

     78.96

Business Services

          328

11.2

0.06%

0.06%

     84.30

     82.02

Hiring & Leasing

            14

-6.7

0.10%

0.11%

     83.88

     82.07

Property

            53

-23.2

0.04%

0.05%

     80.50

     82.50

Other Services

            79

2.6

0.03%

0.04%

     86.44

     86.22

Plastics & Rubber

            11

0.0

0.17%

0.17%

     84.31

     78.27

Insurance

              8

60.0

0.07%

0.04%

     86.24

     84.26

IT

            35

-5.4

0.03%

0.04%

     84.82

     83.86

Motor Traders

            55

96.4

0.15%

0.08%

     84.88

     80.45

Grand total

       1,376

8.6

0.07%

0.07%

     84.01

     81.49

Source: pH, an Experian company

ENDS

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