Partner Article

Insolvencies drop to half-year low

DURING May the rate of business insolvencies fell to its lowest point since January 2010, according to the latest Insolvency Indexfrom research group Experian.

The analysis also reveals an 18% fall in the total number of business insolvencies during May compared to April, bringing the rate of insolvencies down to 0.08% from 0.10% in April.

It also marks an improvement compared to May 2009 when the rate was 0.10%.

Last month’s performance was due to a vast month-on-month and year-on-year improvement among medium sized businesses with 51 to 100 employees.

These businesses, which have suffered some of the highest levels of insolvencies in the last two years, saw the rate of insolvencies fall from 0.24% in April 2010 and 0.23% in May 2009, to 0.13% in May 2010 – the lowest point since September 2007.

Rolf Hickmann, Managing Director of pH, an Experian company, said: “The fall in the number of insolvencies is a good sign and shows that businesses are distinctly aware of the current environment and are taking vital steps to protect themselves from risks.

“Apart from the very largest businesses, companies of all sizes saw marked improvements in insolvency rates. However, the greatest improvement came from the medium-sized businesses, which, as we have commented in previous months, have been the hardest hit by the recession.

“However, the small deterioration in the overall financial strength score for UK businesses during May highlights the need for businesses to ensure they continue to exercise caution with regards to their risk exposure and those they choose to deal with.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .