UK Business Insolvencies Remain at Low Rate
The business insolvency rate for the UK maintained its low level of 0.08% in May for the fourth month running and was down from 0.09% in May 2012, according to the latest business insolvency index from global information services company Experian.
The insolvency rate fell in seven out of the eleven UK government regions in May 2013, a major improvement on the same month in 2012 when just one region (Yorkshire) saw an improvement on the previous year. Insolvencies in North East England fell from 0.14% in May 2012 to 0.11% in May 2013 and Scotland also continued its recent form as insolvency rates stayed at 0.03% for the sixth month in a row.
Looking at insolvencies by company size, smaller businesses, which represent the vast majority of UK companies, again did well. The best performance compared to last May was among companies with 6-10 employees (down from 0.20% to 0.16%) and the insolvency rate among all companies with less than 10 employees (representing 1.8 million businesses) has not risen for the last four months.
“What a difference a year makes – May’s insolvency figures has shown improvements across many areas of the UK,” commented Max Firth, managing director, Experian Business Information Services, UK and Ireland. “What’s particularly pleasing is that insolvencies among smaller businesses, which are the backbone of the UK economy, are showing a longer-term change for the better, whilst building and construction firms can also take heart at the drop off in insolvencies after a particularly difficult period.”
Of the UK’s top five biggest industries, hotel/leisure and building/construction were the most improved – with insolvency rates falling from 0.16% and 0.18% in May 2012 to 0.11% and 0.14% respectively in May 2013.
In addition, non-food retailing had a good month, falling from 0.16% in May 2012 to 0.12%. However, the IT industry went against the trend and saw an increase in its insolvency rate from 0.06% in May 2012 to 0.09% in May 2013.
Other industries that did better in May include motor traders – down from 0.13% in May 2012 to 0.10% in May of this year.