This is the third consecutive month that the rate has fallen year-on-year – the first time this has happened since 2010. Although the rate is marginally higher than in June (when 0.07 per cent of the business population failed), the longer term trend shows a steady and continuing decrease in insolvency rates.
Around the UK, many regions performed better than the same month last year. The insolvency rate either dropped or stayed level in nine out of 11 regions compared to July last year. Outside of Scotland, Yorkshire and the West Midlands showed the biggest yearly improvements.
Looking at insolvencies by company size, there were no significant rises amongst smaller companies with up to 100 employees. Within this group however, businesses with 50-100 employees saw the biggest drop in their insolvency rate from 0.16 per cent in July 2012 to 0.13 per cent in July 2013. Companies with 0-2 employees experienced a considerable drop in insolvencies; from 0.07 per cent in July 2012 to 0.06 per cent in 2013.
At the other end of the scale there has been another rise in insolvencies amongst the UK’s largest companies from 0.08 per cent in 2012 to 0.15 per cent this year.
Max Firth, Managing Director, Experian Business Information Services, UK&I said: “A whole quarter of dropping insolvency rates is really positive news, but the fact that larger companies have seen quite a rise shows that we are not out of the woods yet, especially as this can trickle down the supply chain to smaller companies.
“Business owners need to remain vigilant and ensure that they have monitoring systems in place, however simple, to ensure they know the financial status of their customers and their suppliers and are able to act quickly if one of them gets into difficulty.”
