According to the latest ‘Business Failures’ figures from leading business information provider, Equifax, the hard economic conditions are continuing to take their toll on UK businesses.
The Construction sector ‘continues to struggle, with the number of businesses going bust increasing year on year by 22.6%’, in Quarter 3.
The Equifax ‘Quarter 3 Business Failures Report’ shows a 20.3% year on year increase in companies ‘going under’ and a 7.8% increase Quarter on Quarter.
With a total of 7,994 businesses ‘failing’ in Q3 2011, this is the ‘highest number of failures for more than 12 months and is not far short of the peak in numbers seen in Quarter 2 2009 (8,874)’.
The figures show:
- 20.3% increase in businesses failing in Quarter 3 2011 compared to the same period in 2010
- 7.8% increase in failures for Quarter 3 2011 compared to Quarter 2 2011
- East Midlands is the only region to see a drop in the number of businesses failing year on year
- Wales sees the biggest year on year increase in companies failing
- The Principality also sees the biggest rise in failures Quarter on Quarter
- Retail is the sector hardest hit year on year with a 41.8% increase
- Numbers of businesses failing in the Transport & Communications sector drops both year on year and Quarter on Quarter.
“This new Report continues the disappointing trend we saw start in the summer,” said Mark Nuttall, Director, Equifax Commercial & SME.
“Construction is one of the hardest hit sectors, as businesses continue to find it much harder to keep their heads above water, as the economy fails to pick-up.”
The Transport & Communications sector, however, is showing some resilience with a 5.4% drop in failures for Quarter 3 compared to Quarter 2 this year.
According to the latest figures from Equifax, the North East appears to be the most resilient region across the country this year, with a Quarter on Quarter drop in failures of 14.6%, followed by the East of England at 10%.
But businesses in other parts of the country are finding it harder to survive. Wales recorded the greatest year on year increase in failures in Quarter 3 at 37.1%, closely followed by Scotland with a 34.1% increase in failures.
However, Equifax points out that the numbers affected in these regions are relatively small when compared with other areas of the country where the overall numbers are much larger.
Perhaps more significant is the 30.4% increase in failures year on year for London where the numbers are much bigger. Businesses in the South East also appear to be facing a continuing struggle with a 27% rise in failures.
“It’s not surprising that more businesses are finding it too difficult to survive” concluded Mark Nuttall.
“That’s why those businesses that have survived so far need to continue operating best practice and harnessing the power of the latest risk management solutions to minimise the threat of bad debt and secure the future of their business.
“The importance of monitoring existing customer performance cannot be over-stated to ensure businesses weather the unpredictable conditions that exist at the moment.”
