Insolvency figures show major improvements on May 2012
Nottingham, 1 July 2013 – The latest Business Insolvency Index from Experian®, the global information services company, reveals that overall, the business insolvency rate for the UK maintained its low level of 0.08 per cent for the fourth month running (down from 0.09 per cent in May 2012).
The insolvency rate fell in seven out of the eleven government regions in May 2013 – a major improvement on the same month in 2012, when just one region (Yorkshire) saw an improvement on the previous year. Insolvencies in the North East fell from 0.14 per cent in May 2012 to 0.11 per cent in May 2013 and Scotland also continued its recent form as insolvency rates stayed at 0.03 per cent for the sixth month in a row.
Looking at insolvencies by company size, smaller businesses, which represent the vast majority of UK companies, have again done well. The best performance compared to last May was amongst companies with 6-10 employees (down from 0.20 per cent to 0.16 per cent). In fact, the insolvency rate amongst all companies with less than 10 employees (representing 1.8 million businesses) hasn’t risen for the last four months.
Max Firth, Managing Director, Experian Business Information Services, UK&I said: “What a difference a year makes – May’s insolvency figures has shown improvements across many areas of the UK. What’s particularly pleasing is that insolvencies among smaller businesses, which are the backbone of the UK economy, are showing a longer-term change for the better, whilst building and construction firms can also take heart at the drop off in insolvencies after a particularly difficult period.”
The North East fared the best in May, with an insolvency rate of 0.11 per cent – down from 0.14 per cent in May last year. The East of the UK also did well, down from 0.10 per cent in May last year to 0.08 per cent.
Just one region (the South East), saw a minor increase in its insolvency rate – from 0.07 per cent to 0.08 per cent However, in comparison, last May there were four regions showing an increase.
Of the UK’s top five biggest industries, hotel/leisure and building/construction were the most improved - with insolvency rates falling from 0.16 per cent and 0.18 per cent in May 2012 to 0.11 per cent and 0.14 per cent respectively in May 2013.
This compares favourably to the same month last year which saw the building and construction industry rise from 0.16 per cent in May 2011 to 0.18 per cent May 2012. With the exception of a few months, insolvencies for this industry have been falling slowly but steadily over the last 12 months, which is positive news. The hotel/leisure industry, which struggled during the downturn, also seems to be improving. The insolvency rate for this sector stayed either level or fell every month for the last 12 months.
In addition, non-food retailing had a good month, falling from 0.16 per cent in May 2012 to 0.12 per cent. The same cannot be said for the IT industry, which saw an increase in its insolvency rate from 0.06 per cent in May 2012 to 0.09 per cent in May 2013.
Other industries that did better in May include motor traders - down from 0.13 per cent in May 2012 to 0.10 per cent in May of this year.
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