Cheer as rate of insolvencies falls for mid-size businesses

The latest Business Insolvency Index from Experian, the global information services company, reveals that medium-sized firms saw a drop in insolvencies during March.

The insolvency rate among businesses with 25 to 50 employees fell by 0.07 per cent from 0.24 per cent in March 2012 to 0.17 per cent in March 2013.

Insolvencies also fell by 0.07 per cent among businesses with 11 to 25 employees, down from 0.25 per cent in March 2012 to 0.18 per cent in March 2013.

The analysis shows that across the UK, the insolvency rate remained at 0.08 per cent of the business population for the second consecutive month this year.

Altogether, 1,736 firms failed during March 2013, which was an improvement on March 2012 when 2,112 firms failed.

Max Firth, managing director, Experian Business Information Services, UK and Ireland, said: “The fact that mid-tier businesses are seeing lower rates of insolvency is encouraging. These companies have struggled more than most during the recession as they are not necessarily small enough to be flexible, but are also not big enough to benefit from economies of scale.

“Today’s figures point to a more benign trading environment and suggest that companies are becoming much better at anticipating risk, getting their credit policies in shape and developing better relationships with customers.”

Taking a two-year snapshot of the regions, the figures show that firms in the North East have fared the best with the insolvency rate decreasing by 0.10 per cent since March 2011 – the biggest fall compared to other regions and twice the drop of the next region – the East Midlands.

According to the figures released by Experian, in Yorkshire there were 145 insolvencies in March 2013, compared with 169 in  the same month the year  before.

Of the UK’s top five biggest industries, building and construction saw the biggest fall in the insolvency rate year-on-year – from 0.19 per cent in March 2013 to 0.15 per cent in March 2012.

Other big fallers year-on- year include insurance, breweries, leisure and hotels and  utilities.

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