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Despite Gordon Brown’s insistence that the UK economy is thriving, new analysis
from Equifax reveals that business failure rates are up in Quarter One of 2006
by 13%.
The Retail and Services sectors have suffered the highest levels of business
failure compared to the same period last year.
Business failures in the Retail sector increased by 19% and in the Services
sector by 14%.
The regions
Regionally, business failures also show a worrying trend, with increases across
almost every part of the country.
Wales had the highest increase at 35% compared to Quarter One 2005.
Business failures in the West Midlands rose by 23% and in the East of England by
18%.
London and the North West also saw increases in failures year on year at 15%
each.
The East Midlands was hit by an 11% increase in business failures with the South
East and South West increasing by 10% and 9%.
Yorkshire and the Humber each showed a 7% rise in business failures, but the
North East fared better with just a 2.5% increase year on year.
Scotland and Northern Ireland were the only regions in the UK that had a drop in
business failures compared to Quarter One 2005.
Other market sectors have also experienced increases in business failures,
although not as significant as the Retail and Service sectors.
The Equifax findings show increases of 8% and 7% respectively for the
Construction and Transport & Communication sectors.
The Manufacturing sector,
however, saw only a 4% increase in failures and failures in the Wholesale sector
increased by just 1%.
In light of these latest figures, Equifax is urging companies to protect
themselves by implementing risk management procedures, including basic credit
checks.
It is warning that smaller businesses could be particularly vulnerable
in the current economic climate.
Neil Munroe, External Affairs Director, Equifax explained: “Smaller businesses
are more vulnerable to the impact of bad debt and fraud, yet many of these
organisations fail to take even the basic steps to protect themselves”.
Source:
RedAlert
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