Moving in right direction as insolvency rates among firms drop in the region

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INSOLVENCY rates are falling among Yorkshire businesses, according to new statistics from information services firm Experian.

The figures revealed that last month 132 businesses failed in Yorkshire, representing 0.11 per cent of the region’s business population, compared to an insolvency rate of 0.12 per cent last year. This data equated to a 7.7 per cent decline in insolvencies on last year.

Max Firth, UK managing director for Experian’s business information services division, said that the figures showed “a more stable business environment, with some areas and sectors that have historically seen the highest rates of business failures moving in the right direction.”

Nationally, 1,564 businesses failed during April, representing 0.08 per cent of the business population, and a 13.5 per cent drop on the same period last year.

Mr Firth said: “Since January 2009, when the average financial strength score of UK firms had fallen to its lowest level recorded, there has been a definite and positive upward trend. Combined, these two valuable indicators show how UK businesses are faring and highlight areas where there are opportunities, as well as risks.”

For the second month in a row, firms in the North East have seen the biggest year-on-year improvement – from an insolvency rate of 0.15 per cent in April last year to 0.09 per cent.

The latest insolvency index also highlighted that medium-sized firms, which have traditionally struggled the most, were the most improved during April. Businesses with 51 to 100 employees saw the biggest improvement from 0.22 per cent in April 2011 to 0.10 per cent in April this year. They were also one of the categories to see the biggest month-on-month fall – from 0.20 per cent in March.

Of the UK’s five biggest sectors – business services, building/construction, property, IT and leisure/hotel – the property sector saw the biggest improvement during April, falling from 0.12 per cent last year to 0.06 per cent last month.