Business Insolvency rates at five year low

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The rate of business insolvencies fell in January 2013 to its lowest rate since June 2007, according to the latest figures.

The data from Experian’s insolvency index showed that 0.06% of the business population, or 1,271 companies, failed in January this year, down from 0.07% in January 2012 and from 0.08% at the end of last year.

Mid-sized firms saw the biggest fall in insolvency rates in the month as businesses with between 26 to 50 employees reported a decline from 0.20% in January 2012 to 0.14% this year.

Among those companies with between 51 and 100 employees, the insolvency rate dropped to 0.07% from 0.14% the previous year.

The average insolvency rate among companies with more than 501 employees decreased to 0.15% from 0.20% in January.

Max Firth, managing director of business information services in the UK and Ireland at Experian, said: “Although January is typically a slow month for business insolvencies, the figures for January 2013 do show a marked decline in the insolvency rate, which in fact has hit its lowest level for over five years.

“This follows a relatively stable 2012, which itself was an improvement on the previous year.”

Of the top five largest sectors, the insolvency rate among building/construction businesses fell slightly to 0.12% from 0.13% a year earlier.
Leisure and hotels also saw a modest decline from 0.13% in January 2012 to 0.10% this year.

But the property and IT sectors saw an increase on last year from 0.04% for property and 0.03% for IT to 0.06% respectively.

The most significant falls in insolvency rates stemmed from Scotland, with just 0.03% of the business population failing, down from 0.07%.

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