Figures show Yorkshire firms are beating business failure rates
FEW can deny that times are tough for Yorkshire firms, but the region is one of the better faring regions according to a new report.
The latest corporate failure figures published by business information provider Equifax show that although the number of firms going bust in the region has increased failures only went up by 7% in Q3.
The top performers were the East Midlands and East of England with failures dropping by 1.3% and 4% respectively in Q3 when compared to Q1.
Prospects in Scotland also look positive with just a 0.3% rise when comparing the start of the year with the third quarter.
Other regions faring well in the last quarter included London (+2.2%), the South West (+4.6%) and the North West (+5.7%), which all experienced fairly small increases.
According to the figures it is the North East that is bearing the brunt of the economic downturn suffering a 23.4% increase in failures in Q3 compared to Q1.
However, the region saw only a 1.9% rise in failures in Q3 compared to Q2.
Looking at the different sectors, manufacturing was worst hit seeing a 13.8% increase in the number of businesses failing in Q3, compared to Q1.
Meanwhile, the services and wholesale sectors both saw failures drop by 4.2% and 2.6% respectively in Q3, compared to the beginning of the year.
The construction and transport & communications industries continued to struggle in the difficult financial climate with failures up 11.7% and 11.9% in Q3 compared to the first quarter of 2008.
Neil Munroe, external affairs director of Equifax, said: “While there is clearly immense pressure on businesses with increased costs all-round, it appears that businesses in some regions have been able to take the right precautions to manage cash flow and avoid the risk of bad debt and this is enabling them to stay solvent.
“Although business failures continue to rise and there are a number of external factors that can hit even the most well prepared business, there are indications that firms in some regions and sectors are taking the right precautions to protect themselves from some of the risks in tough trading conditions.”
He added: “Businesses need to continue to use rigorous credit checks, alongside ongoing monitoring of the financial status of their customers and suppliers. By operating best practice and harnessing the power of the latest risk management solutions, firms can minimise the threat of bad debt and secure the future of their business.”
