The latest report from Equifax mirrors a British Chambers of Commerce report released earlier this week suggesting that the UK economy is recovering too slowly, with the BCC saying that more support is needed for private sector firms.
Coming a few weeks after a number of high profile failures, including Jane Norman, Moben Kitchens, Dolphin Bathrooms and T J Hughes, it also reinforces that whatever the size of an organisation, focus on credit management is an absolutely crucial component for survival.
• 3.4% increase in businesses failing in quarter 2 2011 compared to the same period in 2010
• 2.2% increase in failures for quarter 2 2011 compared to quarter 1 2011
• The North East sees the biggest year on year increase in companies failing
• Quarter on quarter, the South East shows the biggest rise in failures
• The retail sector records a 15.9% increase in failures year on year, although the transport & communications sector has highest year on year increase
“This new report is disappointing given that the trend for more than a year has been a reduction in companies failing,” said Neil Munroe, external affairs director, Equifax. “But I think it does reflect the fact that some businesses have just found it impossible to continue to keep their heads above water as the economy fails to pick-up to any great extent. The failures in the Retail sector in particular would indicate the lack of consumer confidence that has been reported recently.
“However, it is also important to realise that we are now comparing figures to a steady fall in failures for the last 12-18 months, and the actual numbers of failures are still not as heavy as they were in early 2009.”