BUSINESS failures declined by 18 per cent last year as the health of UK businesses improved, according to an insolvency index released today.
The upturn was the first in two years, data company Experian revealed.
The total number of insolvencies dropped from 24,209 in 2009, to 19,946 last year, it said – an 18 per cent fall.
And business strength increased as the year progressed, the index showed. The average financial strength of companies dropped to a low point in May, yet grew through the year to reach an annual high in December. “Last year was a period of relative stability for business insolvencies and the improving trend in the insolvency rate has been positive,” said Experian’s Max Firth.
“This contrasts significantly to the last major recession of the early 1990s when the rate escalated over a long period and peaked even as the country came out of recession,” he added.
In Greater London there were 4,692 insolvencies, Experian reported – accounting for 0.96 per cent of all businesses. This was slightly lower than the national average, where 1.04 per cent of businesses failed.
And the number of building companies going bust also fell by 13 per cent in the three months to September, a separate report said.
The number of insolvencies in construction has dropped by 23 per cent since its recession peak, accountants Wilkins Kennedy said yesterday.
“This news will come as a relief for the construction sector,” said Anthony Cork of Wilkins Kennedy.
Wilkins Kennedy warns that although private sector work is beginning to pick up, the public sector pipeline is now beginning to suffer.