business failures, business services, risk strategies

New data from Experian shows that a regional divide has opened up, with the proportion of business failures in the North significantly higher than the number recorded in the South.

The latest report from the information services company revealed that insolvency rates were highest in the North West (0.14% of businesses), North East (0.12%) and Yorkshire (0.11%), whereas the numbers were significantly lower in the South - with the percentage of businesses going under in the South East, Greater London and the South West at 0.07 or 0.08%.

Compared to October, all regions recorded a lower number of business failures in November, although just over 1,700 firms still went under during the month.

Of the five biggest industry sectors – business services, building/construction, property, IT and leisure/hotels – property was the only one that saw its improving insolvency rate improve - from 0.07 per cent in November 2010 to 0.06 per cent November 2011. It was also the sector to see the biggest improvement from October when the rate was 0.08 per cent.

Although smaller businesses (those with between 3 and 10 employees) have generally managed to maintain lower rates of insolvencies over the past year, they experienced the biggest deterioration in financial strength between November 2010 (an average of 81.80) and November 2011 (an average of 81.04).

Max Firth, from Experian, commented: “The latest insolvency index highlights that some businesses continue to need to assess the risk strategies they have in place very carefully. They need first to understand the risks they are exposed to and then protect themselves from debt that could be detrimental to their business on a regular ongoing basis.”