Business Insolvency rates at five year low


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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