Jun
10
2013

Most stable business environment since 2007

Max Firth

We’ve seen the insolvency rate decreasing for some time, and there is further encouraging news from Experian’s latest Business Insolvency Index, which shows that it is staying low.

Our data shows that the level of business insolvencies has remained stable at 0.08 per cent of the total business population for each of the last three months. This follows a steady improvement over the last two years.

Companies large and small continue to experience relatively low insolvency rates, which has a beneficial knock on effect for the whole supply chain.

Whilst many areas have seen minimal change in insolvency levels, one of the most encouraging trends for me is the further improvements in failure rates being experienced in the North of England.

Failures in the North West fell from 0.12% of the population to 0.09% in April. This trend was echoed in the North East (falling from 0.12% to 0.10%) and Yorkshire (0.11% to 0.10%).

You’ve got to go back to 2007 to see a similar consistent pattern. The figures suggest a more stable trading environment and increased resilience to business failure.

Part of the reason that failure rates continue to fall is that businesses of all sizes are becoming much better at anticipating risk and getting their credit policies in shape. Businesses that are better informed about the risks their customers expose them to are in a far better position to manage them

View all of the insolvency index blogs here

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