Business services and construction suffered the highest rate of corporate insolvencies in June, accounting for 40% of all business failures recorded during the month.Business services was the worst-affected sector, experiencing 424 insolvencies during the month, while 296 building and construction firms failed during the same time period, according to figures published by information services firm Experian.
The failure rate for business services was a 5% annual increase, but for construction the rate of insolvencies was actually a 9.4% year-on-year improvement.
Leisure and hotels and non-food retailing were also hard hit with 142 and 104 business failures respectively. For both sectors this was a slight annual increase in the failure rate.
The outlook was more positive for mid-sized and large businesses, with those employing 51-100 employees experiencing a drop in failure rates from 0.23% in June 2010 to 0.19% last month.
The rate of failure among firms with 101-500 employees more than halved year-on-year, falling from 0.17% to 0.08% of the population this June. The East Midlands was the most improved region in June 2011, with the rate dropping from 0.11% in June 2010 to 0.09%.
The South West had the lowest rate of failures, while businesses in the North West and Scotland both experienced an increase against last year.
Max Firth, managing director for Business Information Services at Experian, said: “June’s data indicates that the UK’s business community as a whole is generally stable, however it also points to a change in circumstances for different sized businesses.
“The largest companies have experienced a turnaround in fortunes and now the larger mid-sized businesses are following suit with a significant improvement since last year. Our analysis also shows that businesses in the north seem to be faring slightly worse than their southern counterparts.”