Business failures show worrying increase

The Equifax Quarter 3 Business Failures Report shows a 20.3 per cent year-on-year increase in companies going under and a 7.8 per cent increase quarter-on-quarter. With a total of 7,994 businesses failing in Q3 2011, this is the highest number of failures for more than 12 months and is not far short of the peak in numbers seen in Quarter 2 2009 (8,874).

Mark Nuttall, director, commercial and SME, at Equifax, said: “This new report continues the disappointing trend we saw start in the summer.

“Although Yorkshire and Humberside saw failures go up year-on-year, the region has seen a slight fall of 0.5 per cent quarter-on-quarter. However, overall the UK picture suggests businesses everywhere need to remain cautious. The reality is that businesses are continuing to find it much harder to keep their heads above water, as the economy fails to pick up.

“The failures in the retail sector in particular reflect the lack of consumer confidence being reported from the High Street.”

The North East appears to be the most resilient region across the country this year, with a quarter-on-quarter drop in failures of 14.6 per cent, followed by the East of England at 10 per cent. Meanwhile, Wales recorded the greatest year-on-year increase in failures in Quarter 3 at 37.1 per cent. However, Equifax points out that the numbers affected in these regions are relatively small when compared with other areas of the country where the overall numbers are much larger.

In the key business sectors of the UK economy, retail continues to be hit hardest with a 41.8 per cent increase year-on-year in failures, the figures from business information provider Equifax show.