Small firms stay in business as bigger enterprises get battered

Ben Southwood
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INSOLVENCY among small firms slid last month, as the number of bigger firms going out of business climbed, according to research released today by information services firm Experian.

Firms with between one and 100 employees saw their rate of insolvency slump from 0.19 per cent in June last year to 0.12 per cent this June.

But firms with between 101 and 500 employees were twice as likely to fail compared to last year, at 0.16 per cent. Firms with more than 500 employees had a failure rate of 0.15 per cent, up from 0.12 per cent.

Overall there was a decrease on both the month and the year, as 1,650 businesses became insolvent last month, compared to 1,841 in May and 1,783 in June 2011.

“Although the overall figures for June show a fairly stable environment, the higher rate at the top end will have an impact on the supply chain,” said Experian’s managing director Max Firth. “Many smaller suppliers will find themselves short of a major customer... They will need to move quickly to fill the gap in their customer base,” he added.

Separate data from the Federation of Master Builders said 37 per cent of small and medium sized constructors had lower employment levels in the second quarter, slightly worse than at the start of the year.