9th April 2008
Business closures up, but "grounds for optimism" remain
The number of businesses failing rose by 8.5% in the first three months of this year, according to a report by Experian.
And, at 4,798, the number of firms closing is the second highest since 1997, when the financial data company began keeping records.
Experian's figures, based on Companies House records, show that the financial services and food retailing sectors both suffered a 36% rise in failures during the first quarter of 2008. Agriculture was particularly badly affected, with the closure of 23 farming businesses more than double the 12 firms that failed at the same time last year.
"The 8.5% increase in the number of firms going out of business is a worry for us," Federation of Small Businesses (FSB) spokesperson Simon Briault told More Than Business News, "particularly because if it's happening in the retail sector in local communities it can have a knock-on effect on other businesses."
However, Mr Briault pointed to recent figures from the British Bankers' Association, which show that small firms are in credit with banks overall. "There are grounds for optimism, with the amount of money that small businesses appear to have deposited in banks, that they're not going to be totally in trouble as they were in the early nineties," he said.
Tony Pullen, managing director of Experian's business information division added: "Company failure has far-reaching consequences for the broader economy and people's livelihoods.
"Failed companies expose their suppliers to bad debts, which could push some creditors into insolvency themselves.
"It's never been more important for companies to ensure they take every step they can to protect themselves," he added.
And, at 4,798, the number of firms closing is the second highest since 1997, when the financial data company began keeping records.
Experian's figures, based on Companies House records, show that the financial services and food retailing sectors both suffered a 36% rise in failures during the first quarter of 2008. Agriculture was particularly badly affected, with the closure of 23 farming businesses more than double the 12 firms that failed at the same time last year.
"The 8.5% increase in the number of firms going out of business is a worry for us," Federation of Small Businesses (FSB) spokesperson Simon Briault told More Than Business News, "particularly because if it's happening in the retail sector in local communities it can have a knock-on effect on other businesses."
However, Mr Briault pointed to recent figures from the British Bankers' Association, which show that small firms are in credit with banks overall. "There are grounds for optimism, with the amount of money that small businesses appear to have deposited in banks, that they're not going to be totally in trouble as they were in the early nineties," he said.
Tony Pullen, managing director of Experian's business information division added: "Company failure has far-reaching consequences for the broader economy and people's livelihoods.
"Failed companies expose their suppliers to bad debts, which could push some creditors into insolvency themselves.
"It's never been more important for companies to ensure they take every step they can to protect themselves," he added.
- 5th January 2009 Businesses urged to make redundancies 'last resort'
- 5th January 2009 'Cut interest rate to 1%' says business group
- 2nd January 2009 Gloomier forecast from business group
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