Business failure numbers continue to fall
Equifax has reported that business failure numbers at the start of 2010 have continued the downward trend that started towards the end of last year.
The report shows that overall there was a 9.2% decrease in businesses going under in the first month of the new decade, compared to the last month of the Noughties.
From a regional perspective Scotland had the best performance, with a 53.9% decline in failures, followed by London with a 19% drop in businesses going under in January compared to December and the West Midlands with a 17% drop. Three regions saw an increase in failures in January compared to December including the South West at 15.4%; the East Midlands at 12.3% and Wales at 4.5%.
The Services industry was the strongest performing market sector with a 15.3% decline in failures in the first month of the year compared to December. The Manufacturing and Wholesale sectors both saw increases of 8.2% and 3.9% respectively.
New figures should encourage business owners
“Whilst we must be extremely careful not to get carried away by these figures – they only represent one month - they do seem to suggest that the pace of the economic downturn is slowing” said Neil Munroe, External Affairs Director, of the business information provider.
“The end of the year may well have signalled the most appropriate time from a financial accounting point of view for some businesses to be wound up and therefore pushed up the numbers in December slightly, but we still feel these figures show some optimism and should be good news for general business confidence.
“Indeed, from the middle of 2009 onwards we could see that the rate of failures in businesses was slowing down, compared to the end of 2008 and the early part of 2009. The figures for the last Quarter showed a continuation of this trend, so we are not surprised to see the first month of 2010 sustaining this pattern.
“Clearly the UK economy is not out of the woods. So the businesses that have survived so far must continue to be very careful about how they manage their customer and supplier relationships to ensure they get paid on time and don’t get caught out by bad debt or failure. But businesses right across the UK and across every sector should take real encouragement from this latest data.
Posted February 21, 2010
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