Leading business information provider, Equifax, has released its Business Failures Report for the first quarter of 2009. The comparison with the same period in 2008 is stark with an overall increase in businesses going bust of 35%. Neil Munroe, External Affairs Director, Equifax, does not believe this figure will surprise many. But what may be more encouraging is when the Quarter 1 figures are compared with the more recent Quarter 4 2008 numbers – where an increase of just 3.3% is reported.
“It is hardly surprising that year on year the level of failures has increased so significantly” explained Neil Munroe. “At the beginning of last year we were only just starting to see the impact of the credit crunch and certainly the word ‘recession’ had not yet been uttered. But obviously things have been very different at the start of this year with consumer confidence really struggling to lift. However, what we do seem to be seeing is a slowdown in what was a run-away train of failures at the end of last year. Compared to Quarter 4, there has been just a 3.3% increase in the number of failures and some sectors and regions of the country have even recorded a drop in businesses going to the wall. It would be immensely dangerous to take too much from just one Quarter’s performance, but it is a useful benchmark to watch in the coming months.
“But the bottom line is that our latest figures reinforce the fact that the variety of Government and private sector initiatives still have a long way to go in helping stimulate confidence in the business community. Indeed, there is a risk that as we head into the new tax year we might even see the numbers creep up again as some businesses find it impossible to stay ahead of their creditors including the tax man.