Firms prosper as insolvency rate declines

 
Tim Wallace
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BUSINESS insolvencies fell sharply in July compared with the same month of 2011, according to research out today from Experian, with almost every region and sector registering an improvement.

A total of 1,776 firms failed in the month, down on the 1,962 that failed in July 2011 – a drop of almost 200 despite the double-dip recession.

That takes the insolvency rate down from 0.1 per cent of firms to 0.09 per cent.

The biggest improvement came among large firms – 0.15 per cent of companies with more than 501 employees failed last July, compared with 0.08 per cent this year.

The next biggest change came in firms with between 11 and 25 members of staff, from 0.26 per cent last July to 0.19 per cent last month.

In London the rate fell from 0.1 per cent to 0.08 per cent.

“Since March this year, when the insolvency rate peaked at 0.11 per cent, it has remained fairly stable – between 0.08 per cent and 0.09 per cent,” said Experian’s Max Firth.

“The lack of any real increase is clearly welcome and this is unlikely to change in the near future.”

However not every sector saw an improvement – food retailers’ insolvency rate rose from 0.1 per cent to 0.12 per cent, and the automotive sector saw a rise from 0.1 per cent to 0.14 per cent.