UK business failures drop in April

Latest Experian figures reveal all areas of the UK have seen an improvement in financial health

Business failures across the UK dropped in April, with market watchers daring to utter the word "stable", according to the latest Experian figures.

In total 1,564 businesses failed during April 2012, representing 0.08 per cent of the business population.

This is compared with 1,808 firms that failed in April last year or 0.10 per cent of the business population.

Even more positively, all areas of the UK saw their average financial health score improve – from an average of 83.2 in April 2011 to 83.7 during April 2012.

Max Firth, UK managing director if Experian’s Business Information Services division, said: “Today’s figures show a more stable business environment, with some areas and sectors that have historically seen the highest rates of business failures moving in the right direction.

“Since January 2009, when the average financial strength score of UK firms had fallen to its lowest level recorded, there has been a definite and positive upward trend,” he added.

“Combined, these two valuable indicators show how UK businesses are faring and highlight areas where there are opportunities, as well as risks.”

April was also a more positive month for mid-sized firms, which have struggled the most in the past, but saw the most improvement in performance for April, according to Experian.

Firms with 51 to 100 employees saw the biggest improvement in performance with a 0.10 per cent fall in the number of insolvencies when compared with March.

Geographically, firms in the North East saw the biggest year-on-year improvement; from an insolvency rate of 0.15 per cent to 0.09 per cent this April.

The East Midlands and Scotland were the only two areas of the UK to see their insolvency rate increase compared with April 2011 – both rose from 0.07 per cent in April 2011 to 0.09 per cent this year.