LONDON BUSINESSES & SERVICES SECTOR HIT HARDEST BY FAILURES
Equifax Business Failures Report sees the home of the services industry suffer in first half of 2007
London, 20th July 2007 – The latest Business Failures Report from Equifax, the business information specialist, reveals that London and the Services sector have experienced the highest increases in businesses going bust in the second quarter of 2007. And there could well be a connection between the high increases in failures in the London Region and in the Services sector, which is well represented in the Capital.
“Whilst Quarter 1 2007 saw an overall drop in failures year on year, the second quarter hasn’t been quite as positive with an overall increase in failures of 4.5%”, confirmed Neil Munroe, External Affairs Director, Equifax. “In particular, the high increase in businesses going bust in London and the Services sector at 18.2% and 24.7% respectively could be an early warning sign of the impact of recent interest rate rises on the business economy.”
The Transport sector, which plays a key supporting role to the Services industry, also saw quite a significant increase in failures in Quarter 2 at 13.1%. However the Manufacturing industry saw a 10.9% drop, which probably reflects the continued consumer demand that is being experienced across the UK.
“The 4.5% increase in business failures for Quarter 2 should send a warning shot across the bows of UK business” confirmed Neil Munroe. “This is a turnaround from the small drop in failures seen in Quarter 1 and means that all businesses of every size should be taking all the precautions possible to avoid the risk of bad debt. But it is small businesses, in particular that are the most vulnerable to the effects of bad debt and it is therefore essential for them invest in tools that help reduce their financial risks.”
The industry sectors that appear to be performing best in Quarter 2 include the Manufacturing with a 10.9% drop in failures year on year and Retail with a 0.2% drop compared to Quarter 2 2006. Whilst seeing an increase in failures year on year at 1.4%, the Construction sector also seems to be performing relatively well.
From a regional perspective, alongside London, the South West and Scotland saw high levels of failures year on year at 15.5% and 8.6% respectively. The regions that performed best in Quarter 2 were the North East with a 12.4% drop in failures and Northern Ireland with a 20% drop year on year.
“It is crucial to recognise the catastrophic effect the failure of customers or suppliers can have on an organisation”, concluded Neil Munroe. “That’s why it’s crucial to not only do the initial checks, but maintain ongoing monitoring which will highlight changes in a customer’s financial status and ensuring businesses always know who they’re doing business with and understand the risks. They will then be able to avoid the threat of fraud and bad debt, which can all too easily lead to their own failure.”
Equifax 2007 UK Business Failures Report Quarter 2 2007
Sectors
Increase or decrease in failures
Quarter 2 2006 vs Quarter 2 2007 and Year to Date 2006 vs Year to Date 2007
Q2 2006 vs Q2 2007 % (to 1dp) |
Year to Date 2006 vs Year to Date 2007 % (to 1dp) |
|
Construction |
+1.4% |
+6.6% |
Manufacturing |
-10.9% |
-10.8% |
Wholesale |
+8.6% |
+6.5% |
Services |
+24.7% |
+12.8% |
Retail |
-0.2% |
+3.3% |
Transport & Communications |
+13/1% |
-3.8% |
TOTAL YEAR ON YEAR |
+4.5% |
+0.79 |
Regions
Increase or decrease in failures
Quarter 2 2006 vs Quarter 2 2007 and Year to Date 2006 vs Year to Date 2007
Q1 2006 vs Q1 2007 % (to 1dp) |
Year to Date 2006 vs Year to Date 2007 % (to 1dp) |
|
Northern Ireland |
-20% |
-3.7% |
Scotland |
+8.6% |
+21.2% |
North East |
-12% |
-3% |
Yorkshire & Humberside |
+5.3% |
+5.5% |
East Midlands |
-5.4% |
-1.4% |
South East |
-5.2% |
-2.2% |
East of England |
+2.9% |
+1.8% |
North West |
+2.2% |
-1.73% |
South West |
+15.4% |
+8.77% |
West Midlands |
-4.9% |
-7% |
London |
+18.2% |
+4% |
Wales |
+7% |
+2.5% |
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: claire@harrisonsadler.com
About Equifax
Equifax Inc. (NYSE:EFX, www.equifax.com) is a global leader in turning information into intelligence. For businesses, Equifax provides faster and easier ways to find, approve and market to the right customers. For consumers, Equifax offers easier, instantaneous ways to buy products or services, and better insight into and management of their personal credit. Headquartered in Atlanta, Equifax reported annual revenue of over $1.4 billion in 2005, and employs over 4,500 employees in 13 countries in North America, Latin America and Europe.
Equifax. Information That Empowers.
