NEWS23 November 2009

Business services tops Insolvency Index again

Financials UK

UK— The business services sector has once again seen the highest number of company failures, according to Experian’s latest monthly Insolvency Index.

The business services sector, which includes market research and polling agencies, ad agencies, data services companies and software suppliers, saw 409 firms shut their doors during the month, well ahead of the next highest total which was 288 in the building and construction market.

However, the average financial strength score (which predicts the likelihood of a business failing over the next 12 months) was at its highest since July 2008.

Experian scores companies between 1-100 using data such as payment histories and financial accounts. Scores of 100 are classed as the least likely to fail and 1 the most likely. On average across all sectors, the financial strength score was 81.

In the business services sector, the financial strength score was 81, compared to 79 in October 2008.

Rolf Hickman, managing director of Experian-owned marketing analytics firm pH, said: “Throughout 2008, the average financial strength score had been seeing a downward trend, but 2009 has seen a reversal. The financial solidity of UK businesses has been improving over the year.”

Hickman added that insolvency levels could “maintain a low level and even start to fall” if financial strength scores continue to rise.