Is The Rate of Business Failure Slowing?

www.ukba.co.uk

Businesses are failing at a slower rate, new research for Crimson Business suggests.
According to a new business failures report, 35% more businesses went bust in the first quarter of 2009 than during the same period in 2008. However, the failure rate appears to be slowing. Early 2009 figures are up by just 3.3% on the fourth quarter of 2008.

Nationwide, the picture differs. The North East suffered the biggest percentage rise in year-on-year business failures, at 82.9%, while London failures increased by 21.9%. Neil Munroe, external affairs director of business information provider Equifax, said: “At the beginning of last year we were only just starting to see the impact of the credit crunch and certainly the word ‘recession’ had not yet been uttered. But obviously things have been very different at the start of this year with consumer confidence really struggling to lift. However, what we do seem to be seeing is a slow down in what was a run-away train of failures at the end of last year.”

The construction sector suffered the greatest instance of business failures, year on year, with 65.2% more businesses folding in the first quarter of 2009 compared to the same period last year. Manufacturing and retail sectors also saw quite significant year on year increases in failures at 44.4% and 44.8% respectively. The services sector is performing better, with business failures increased by just 15.7% year-on-year for the first quarter of 2009. In addition, there was a 9.4% drop in service companies going under when compared to the fourth quarter last year.

© Crimson Business Ltd, 2009

www.ukba.co.uk