Business failures continue to drop despite economic downturn

The number of business failures in the UK dropped last year by nearly one per cent according to the annual tally of business casualties published by business information company D&B.

The total number of failures, the figures exclude Northern Ireland, has dropped from 40,847 last year to 40,532 at the end of this year - a fall of 0.8 per cent. But there was a large increase in business collapses in the capital.

Mr Philip Mellor, Senior Analyst for D&B, said: “Business failures have fallen for the second year in succession. The last quarter’s tally is six per cent down on the previous quarter (9,864 failures compared with 10,504). Although the annual rate of decrease is slight, it still provides a good deal of New Year cheer when you consider the general economic slowdown. It shows that business, outside the capital, are surviving well.”

There are, however, wide regional variations. The largest increase in business collapses occurred in London where business failures rose by 8.3 per cent.

The number of business failures also rose significantly in Scotland by 6.6 per cent. Because of differences in bankruptcy regulations they cannot be compared with the rest of the country.

The South East recorded a 7.4 per cent drop in business failures - the highest for any region of the country followed by Wales with a 6.7 per cent drop and the South West (-5.3 per cent).

Small businesses did even better than larger businesses. The number of small business bankruptcies fell by 2.4 per cent from 24,373 to 23,790. On the other hand the number of larger company liquidations increased by 1.6 per cent from 16,474 to 16,742. (CD)