February insolvency rate improves among UK’s larger firms

These firms also saw the biggest fall in the rate of insolvencies when compared to the 0.17 per cent of firms with 101 to 500 employees that failed during February 2012.

Businesses with over 501 employees have also shown improvements, with insolvency rates falling for the last two months from a peak of 0.24 per cent in December 2012 to 0.11 per cent in February 2013. The insolvency rate is now back to the level it was at in February last year.

Analysis shows that across the UK, 0.08 per cent of the business population (1,646 companies) failed during February 2013 – an improvement on February 2012 when the insolvency rate stood at 0.10 per cent.

The only businesses that showed an increase in their insolvency rate compared to February 2012 were those with between 51-100 employees. They saw their rate rise from 0.12 per cent last year to 0.16 per cent in February 2013.

Max Firth, Managing Director, Experian Business Information Services, UK&I said: “The falling insolvency rate among UK’s larger firms will impact positively on the wider supply chain, often smaller businesses.

“The overall lower level of insolvencies is also encouraging to see. Much has been made of the argument that low insolvency rates are in part due to ‘Zombie businesses’ – weak firms unable to do more than survive and pay off the interest on their debt. Many of the weaker businesses failed during 2008-2009 when insolvency rates were high and more businesses closed than started up, leading to the business population reducing by seven per cent. The firms that have since survived are now more robust. Furthermore, we are once again seeing more businesses starting up than closing.”