IT sector bouncing back from the doldrums

Latest Experian figures reveal IT insolvencies dropped 48 per cent in February 2011

The IT sector appears well on the road to recovery according to the latest insolvency figures from Experian, with a 48 per cent drop in the number of firms going bust in February.

A total of 39 firms gave up the ghost in February 2011 compared with 76 in February 2010, according to Experian's Insolvency Index. This equates to a 48 per cent drop in the number of IT insolvencies.

The overall financial strength of UK businesses also continued to improve, from 81.18 in February 2010 to 81.60 in February 2011.

Max Firth, managing director of Experian company pH, said: “The period of stability for businesses in the UK continues to head in a positive direction overall. However, while smaller and larger companies are improving, insolvency rates for the mid-sized companies (with 20 to 100 employees) continue at the same rate month on month.

"This could mean that in more challenging times they fall victim to being too large to be flexible and too small to rely on a solid, established business structure and long-term contracts.”

Scotland saw the greatest improvement, with the lowest insolvency rate at 0.06 per cent in February, while Wales saw the biggest increase in its insolvency rate, rising to 0.11 per cent from 0.08 per cent in February 2010.

Yorkshire was the worst-performing region in England, with a rate of 0.13 per cent, and the Greater London region was where businesses had the lowest financial strength score at 80.51.

The smallest (with one to two employees) and largest (501-plus employees) companies had the lowest rate of insolvencies with 0.06 per cent and 0.09 per cent respectively.