Study shows more start-ups surviving tough conditions

March insolvency figures show drop in failure rates since 2012

Start-up businesses in the UK are showing increased resilience against tough economic conditions, with a significant fall in insolvencies in March 2013 compared to the same time in 2012. The Business Insolvency Index conducted by information services group Experian found that 1,115 businesses with up to 5 employees failed in March of this year – 243 less than in 2012. March was the second consecutive month this year in which insolvencies remained steady at 0.8% across the board, painting a picture of sustained improvement after a difficult few years for small firms in the UK.

Number of employees Insolvencies – March 2013 Insolvencies – March 2012 % of businesses failing March 2013 % of businesses failing March 2012
1-2 852 1,014 0.06% 0.07%
3-5 263 344 0.11% 0.15%

Around the country, businesses in the North East have seen the most significant drop in failure rates, with the insolvency rate in the region declining by 0.10 per cent in the period since March 2011 – more than twice the fall of the next region, the East Midlands. Of the UK’s five biggest industries, building and construction saw the biggest drop in insolvencies with the insurance, brewing, leisure and hotel sectors also enjoying significant falls. Max Firth, managing director of Experian UK and Ireland, said: “The overall rate of insolvencies for the first three months of 2013 is a significant improvement on the equivalent months in 2012 – from 0.27 per cent to 0.22 per cent.  “Today’s figures point to a more benign trading environment and suggest that companies are becoming much better at anticipating risk, getting their credit policies in shape and developing better relationships with customers.”

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