Shards of light continue to filter through the gloom of the economic downturn, with the latest figures from market watcher Equifax reporting that business failures are continuing to decline.
According to Equifax’s figures, there was a 9.2 per cent decrease in businesses going under in January, compared with December.
Neil Munroe, external affairs director at Equifax, said: "While we must be extremely careful not to get carried away by these figures – they only represent one month – they do seem to suggest that the pace of the economic downturn is slowing."
Scotland had the best performance from a regional perspective with a 53.9 per cent drop and London claimed second place with a 19 per cent drop in the number of firms failing. The West Midlands was third with a 17 per cent decline.
However, three regions saw an increase in failures: the South West, East Midlands and Wales with increases of 15.4 per cent, 12.3 per cent and 4.5 per cent respectively.
Strongest performing sectors were services with a 15.3 per cent decline in failures, with manufacturing and wholesale seeing an increase in failures of 8.2 per cent and 3.9 per cent respectively.
Munroe added: "The end of the year may well have signalled the most appropriate time from a financial accounting point of view for some businesses to be wound up and therefore pushed up the numbers in December slightly. But we still feel these figures show some optimism and should be good news for general business confidence."
However, he said the UK economy is not yet out of the woods.
"Businesses that have survived so far must continue to be very careful about how they manage their customer and supplier relationships to ensure they get paid on time and don't get caught out by bad debt or failure," he said. "But businesses right across the UK and every sector should take real encouragement from this latest data."
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