The latest insolvency index from information services company Experian, has revealed a year-on-year decline in business bankruptcy during June. The overall financial strength score of UK businesses also improved, from 80.83 in June 2009 to 80.66 in June this year.
During June 20101,771 UK businesses failed, 13.4% fewer than in June 2009 when 2,044 firms became insolvent. As a result, the year-on-year insolvency rate fell from 0.10% to 0.09% in June.
At 0.14%, the north east had the highest insolvency rate of the regions in June, with Yorkshire (0.12%) close behind. In contrast, at the opposite end of the country businesses in the south west saw a UK low of 0.07%, while Greater London had an insolvency rate of 0.08%.
Other key highlights include:
· Scotland was the only region of the UK to see an increase in the insolvency rate, up to 0.08% from 0.06% in June 2009
· As well as being the region with the lowest insolvency rate, the south west also held the highest financial strength score (82.50)
· Smaller companies with 11-25 employees saw the greatest year-on-year reduction in the insolvency rate (from 0.29% in June 2009 to 0.20%).
· The largest businesses with 501 plus employees suffered the most since last year, seeing the insolvency rate double from 0.07% in June 2009 to 0.14%.
· The smallest businesses (with 1 to 2 employees) were the only group to see an improvement in their financial strength scores – from 81.33 in June 2009 to 81.95 in June 2010.
· The financial strength of businesses in the transport industry rose from 75.98 in June 2009 to 78.20 – the biggest improvement compared to other sectors. This sector also saw its insolvency rate drop from 0.12% to 0.07% over the year.
· Businesses in the oil industry held the highest financial strength score during June (85.54).
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