BUSINESS FAILURES HIT LONDON AND SERVICES SECTOR
Equifax Business Failures Report reveals Capital continues to suffer in Q3
London, 3rd October 2007 – The latest Business Failures Report from Equifax, the business information specialist, reveals that once again the London region and the Services sector have been hit hard by increases in businesses going under.
The run of interest rate increases earlier in the year appear to be taking their toll on UK commercial success. As well as the Services sector experiencing a 12.7% rise in business failures in the 3rd Quarter compared to the same period last year, the Construction and Wholesale sectors also appear to have suffered a major downturn in business performance in the summer months.
“Despite an encouraging start to 2007, the 3rd Quarter has seen an increase in business failures of 4.3%” confirmed Neil Munroe, External Affairs Director, Equifax. “This follows the 4.5% year on year increase we saw in the 2nd Quarter. When combined, the figures start to paint a worrying trend for the rest of this year and beyond. In the 3rd Quarter, London appears to have borne the brunt of failures, up 6.6%. And as a prime location for the Services sector, which also suffered in the 3rd Quarter with a 12.7% rise in failures, this is probably not surprising.
“As if further proof was needed of the effect of interest rate rises, both the Wholesale and Construction sectors were also hard hit, with failures up 8.2% and 12.3% respectively. And with the impact of the credit crunch starting to take effect with lenders tightening their credit risk criteria, this will put additional pressure on businesses, making on-going monitoring of customers and suppliers absolutely crucial.”
The Transport & Communication sector followed the trend set in the 2nd Quarter, with an increase in failures of 7%. However the Equifax Report saw some good news, with Manufacturing showing a drop of 6.4% in failures year on year. The Retail sector also saw a drop of 7.8%.
Looking at the regional picture, the East and West Midlands experienced tremendous spikes in failures, topping 20% and 15.4% respectively. Earlier in the year, these regions both experienced a decline in failures. In contrast, Scottish fortunes have turned in the 3rd Quarter with failures down 7.8%, compared to an increase of 8.6% in the second quarter.
Meanwhile the North East continues to improve with a drop of 11.7% in the 3rd Quarter compared to the same period last year, and the South East follows with a decrease of 4.1%. The East of England suffered a small fall of 0.7%, similar to that seen in the 2nd Quarter.
“Our latest Business Failure figures show how easy it is for sectors and regions to swing from one extreme to another in just one quarter” concluded Neil Munroe. “And this makes it essential for businesses to protect themselves. By monitoring the financial status of suppliers and customers, businesses can anticipate their potential failure and minimise its impact on their own profits. It only takes one customer to go bust to put another business in jeopardy. Careful monitoring of accounts and knowing who they do business with, means organisations can avoid the threat of fraud and bad debt – protecting the future of their own business.”
Equifax 2007 UK Business Failures Report Quarter 3 2007
Sectors
Increase or decrease in failures Quarter 3 2006 vs Quarter 3 2007 and Year to Date 2006 vs Year to Date 2007
Q3 2006 vs Q3 2007 % (to 1dp) |
Year to Date 2006 vs Year to Date 2007 % (to 1dp) |
|
Construction |
+12.3% |
+8.4% |
Manufacturing |
-6.4% |
-9.3% |
Wholesale |
+8.2% |
+7% |
Services |
+12.7% |
+12.8% |
Retail |
-7.8% |
-4.8% |
Transport & Communications |
+7% |
-0.4% |
TOTAL YEAR ON YEAR |
+4.3% |
+1.9% |
Regions
Increase or decrease in failures Quarter 3 2006 vs Quarter 3 2007 and Year to Date 2006 vs Year to Date 2007
Q3 2006 vs Q3 2007 % (to 1dp) |
Year to Date 2006 vs Year to Date 2007 % (to 1dp) |
|
East Midlands |
+20% |
+5.8% |
East England |
-0.7% |
-0.4% |
London |
+6.6% |
+3.7% |
North East |
-11.7% |
-1.3% |
North West |
+3.8% |
+1.2% |
Scotland |
-7.8% |
+15.1% |
South East |
-4.1% |
-5.8% |
South West |
+3.1% |
+5% |
Wales |
+5.5% |
+1.2% |
West Midlands |
+15.4% |
-1% |
Yorkshire & Humberside |
+7.9 |
+8.5% |
END
Notes to Editors
For commentary from Neil Munroe or further press information please contact: Claire Foster, Kate Clements or Wendy Harrison at HSL on 020 8977 9132 / Fax: 020 8977 5200 or Email: katec@harrisonsadler.com
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