London 17th October 2011 - According to the latest Business Failures figures from leading business information provider, Equifax, the hard economic conditions are continuing to take their toll on UK businesses.
The Equifax Quarter 3 Business Failures Report shows a 20.3% Year on Year increase in companies going under and a 7.8% increase Quarter on Quarter. With a total of 7,994 businesses failing in Q3 2011, this is the highest number of failures for more than 12 months and is not far short of the peak in numbers seen in Quarter 2 2009 (8874).
"This new Report continues the disappointing trend we saw start in the Summer", said Mark Nuttall, Director, Equifax Commercial & SME. "The reality is that businesses are continuing to find it much harder to keep their heads above water as the economy fails to pick-up. The failures in the Retail sector in particular reflect the lack of consumer confidence being reported from the High Street."
According to the latest figures from Equifax, the North East appears to be the most resilient region across the country this year, with a Quarter on Quarter drop in failures of 14.6%, followed by the East of England at 10%.
But businesses in other parts of the country are finding it harder to survive. Wales recorded the greatest Year on Year increase in failures in Quarter 3 at 37.1%, closely followed by Scotland with a 34.1% increase in failures. However, Equifax points out that the numbers affected in these regions are relatively small when compared with other areas of the country where the overall numbers are much larger.
Perhaps more significant is the 30.4% increase in failures Year on Year for London where the numbers are much bigger. Businesses in the South East also appear to be facing a continuing struggle with a 27% rise in failures Year on Year.
In the key business sectors of the UK economy, Retail continues to be hit hardest with a 41.8% increase Year on Year in failures. The Construction industry is also finding conditions challenging with a 22.6% rise in companies going under.
The Transport & Communications sector, however, is showing some resilience with a 5.4% drop in failures for Quarter 3 compared to Quarter 2 this year.
"It’s not surprising that more businesses are finding it too difficult to survive" concluded Mark Nuttall. "That’s why those businesses that have survived so far need to continue operating best practice and harnessing the power of the latest risk management solutions to minimise the threat of bad debt and secure the future of their business."
"The importance of monitoring existing customer performance cannot be over-stated to ensure businesses weather the unpredictable conditions that exist at the moment."
The definition of a business failure in the Equifax report is any business with a winding up order, or in liquidation - NOT those in administration, receivership, and company voluntary arrangements.
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