The decline in the insolvency rate among the pub, restaurant and wider leisure sector continued in June, according to the latest insolvency index from Experian.
The proportion of businesses in the sector that failed fell from 0.15% in June 2012 to 0.14% last month, although there was a slight increase in the number of firms that folded (141 against 136).
However, the insolvency rate remains twice that of the UK average of 0.07% in June, which fell from 0.08% in the same month last year. It’s the second consecutive month that the rate has fallen year-on-year.
Max Firth, managing director of Experian Business Information Services UK & Ireland, said: “This is good news overall - we’ve already seen several months of low but level insolvency rates and the fact they have come down further indicates that firms are operating with more confidence than in recent years.
“However, as businesses start to think about growth and companies start to restock and rehire, the insolvency rate could well go up as cash flow becomes an issue. This makes it all the more important for SMEs to understand who they are supplying, how quickly they pay, and think about what credit options are open to them in advance.”
