20 July 2009 | Jake Kanter
Business failures have increased by more than a third in the past 12 months, according to research by Equifax.
The business information provider found that UK company closures rose nearly 40 per cent in the second quarter of this year, compared with the same period in 2008. A total of 8,874 firms ceased operations during this period.
The construction industry was hardest hit, with nearly a 63 per cent rise in companies going bust. In manufacturing, failures were up 51 per cent, while in the services sector 35 per cent more companies shut down.
"The recession is still having an enormous impact on business fortunes with many organisations unable to survive the onslaught of falling sales and restricted access to funding to cover the cash flow gaps," said Neil Munroe, external affairs director at Equifax.
But, he added, failures may have "hit the bottom", with only a 2 per cent rise in company closures in the second quarter of 2009 compared with the first quarter.
Firms in the West Midlands were worst hit by the economic downturn, posting a 55 per cent rise in shutdowns on last year.