While the total number of business failures fell during the first half of 2007, retail, leisure and agricultural firms are not faring so well in the economic climate, it has been claimed.
According to the latest figures by global information company Experian, these sectors have seen significant jumps in the number of business insolvencies, particularly in the period April to June.
A total of 329 companies in the hotels and leisure sector failed in the first six months of 2007, up 16% on 2006, Experian said.
Likewise, 568 retailers have gone bust, up by 4% on last year, but up 21% between April and June, and the number of agricultural businesses failing has increased by well over 50%.
According to Jo Howard, marketing director for Experian’s Business Information division, the level of failures in the leisure and retail sectors is particularly worrying as these tend to be barometers of the financial health of the nation.
She said: “It could reflect a consequence of the general slowdown in consumer spending as the five interest rate increases have begun to bite, which means that we could see more failures in these sectors in the coming months.”
“The increase in failures in the agricultural sector is not unexpected, given the well-documented problems faced by the industry, from the administrative problems over EU subsidy payments to lower farm prices and the erratic weather affecting crops.”
However, the overall picture is more positive, with the number of businesses becoming insolvent across the UK falling by 6.9% (to 8,930) during the first six months of 2007, meaning there were 662 fewer failures recorded than in the same period in 2006.
Howard added: “This year started well, kicking off in quarter one with the biggest fall in corporate insolvencies for four years.”
© Crimson Business Ltd. 2007
