UK businesses finished 2009 in solid shape, with insolvency rates waning and financial strength on the up, research has found.
Credit services firm Experian's Insolvency Index reveals that IT companies stacked up well against other businesses in December, with 79 industry firms going to the wall during the month. This represents a 15.1 per cent year-on-year drop.
The insolvency rate for the industry stood at 0.07 per cent in December. This is more than a fifth down from the 0.09 per cent rate of December 2008 and is significantly lower than the national rate of 0.11 per cent.
The average financial strength score of IT companies rose from 80.1 to 83.83 over the course of 2009. Across all sectors, the average rating increased from 79.46 to 81.37.
Experian claims the business failure rate peaked during the opening six months of 2009, before easing off during the year's second half. Across the entire year, insolvencies were up 12 per cent annually, compared to a 29.3 per cent spike in 2008. The overall insolvency rate for 2009 stood at 1.25 per cent.
Rolf Hickmann, managing director of pH, an Experian company, said: “Many more businesses are taking steps to protect themselves from the risks of not getting paid, the impact on them if a key supplier or customer goes bust, and indeed the risk of insolvency within their own businesses.
"With this in mind, businesses need to not only proceed with caution when it comes to both new and existing business clients, but also ensure that their own house in order, so that they themselves are appealing prospects for business.”
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