The rate of business failures fell to its lowest level in January since June 2007, according to the latest data released by Experian.
Companies across the UK saw an 8% improvement in their combined financial strength score from 79.46 in January 2009 to 81.16 January 2010. The rate of insolvencies fell to 0.07% in January 2010, with seven in every 10,000 businesses going under. This compares to an insolvency rate of 0.09% in January 2009 and 0.11% in December 2009.
"It's encouraging to discover that not since the current financial
crunch started have so few firms become insolvent in a single month,"
said Rolf Hickmann, Managing Director of pH, an Experian company.
"Whilst
it is too early to predict whether we are fully out of the woods, this
does hint at an improvement in the health of UK businesses, something
which is reinforced by the financial strength view provided by
January's data."
Other key highlights in the survey:
- As in January 2009, businesses in the South West continued to be the most robust, holding the best financial strength score during January 2010.
- The North East saw its insolvency rate decrease by over 30% from 0.19% to 0.12% in January, subsequently losing its position as the region with the highest rate.
- Yorkshire, with 0.13%, witnessed the highest rate of failures in January.
- Scotland, the only region to see a year-on-year increase in insolvencies, was beaten by Wales to having the lowest rate of business failures in January (0.06%).
- Businesses in Greater London saw the highest year-on-year improvement in their financial health. However, they also had the lowest overall financial strength score of any region.
- The highest insolvency rates during January 2010 were among businesses with 11 to 100 employees (0.19%).
- 1 to 2 employee firms had the lowest rate of insolvencies (0.04%).
- Businesses with 51 to 100 employees hold the worst average financial strength score (80.06), although they did see a small year-on-year improvement (from 79.92).