The pub, restaurant and wider leisure industry experienced the fastest decline in its insolvency rate among major business sectors in May compared to the same month in 2012, according to the latest insolvency index from Experian.
There was a decline in both the absolute number of insolvencies in the sector, which fell from 151 to 111, and the proportion of sector firms that failed (0.16% to 0.11%). Experian said that of the five biggest UK industries, the most improved were the hotel/leisure sector and building/construction, which saw its insolvency rate fall from 0.18% to 0.14% between May 2012 and May 2013.
Experian said that the hotel/leisure industry, which “struggled during the downturn, seems to be improving”. “The insolvency rate for this sector stayed either level or fell every month for the last 12 months.”
Across UK industries as a whole, the insolvency rate maintained its low level of 0.08% for the fourth month running. It compares to a rate of 0.09% in May 2012.
The insolvency rate fell in seven out of the eleven government regions in May 2013. Experian said this was a major improvement on the same month in 2012, when just one region (Yorkshire) saw an improvement on the previous year. Insolvencies in the north east fell from 0.14% in May 2012 to 0.11% in May 2013 and Scotland also continued its recent form as insolvency rates stayed at 0.03% for the sixth month in a row.
The best performance compared to last May was amongst companies with 6-10 employees (down from 0.2% to 0.16%). The insolvency rate amongst all companies with fewer than 10 employees hasn’t risen for the last four months, Experian pointed out.
Max Firth, managing director of Experian Business Information Services UK & Ireland, said: “What a difference a year makes - May’s insolvency figures has shown improvements across many areas of the UK.
“What’s particularly pleasing is that insolvencies among smaller businesses, which are the backbone of the UK economy, are showing a longer-term change for the better, whilst building and construction firms can also take heart at the drop off in insolvencies after a particularly difficult period.”