Rate of business failures could support 2009 recovery predictions

Those working with small businesses are starting to believe that perhaps the worst is over with the expression “light at the end of the tunnel” being aired. Dennis Scott, commercial director of e-bcm, said that recent figures showing a 27% increase in the number of small businesses failing in Octob



Those working with small businesses are starting to believe that perhaps the worst is over with the expression “light at the end of the tunnel” being aired.

Dennis Scott, commercial director of e-bcm, said that recent figures showing a 27% increase in the number of small businesses failing in October and November compared to last year was worrying but the level was dropping.

“The figures are high but the quarter-to-quarter jump in failure numbers has not been a great as it was between Q2 and Q3, when we saw the number almost double from just under 10 per cent to almost 20 per cent,” he said.

“While the further increase is bad news, the rate of increase has slowed a little and when the December numbers are added, it may not look quite as bad as it does now,” he added.

Scott expects the number of business failures to start declining in the second half of next year.

Yesterday, US analyst house Forrester indicated that it expects a recovery to start in the American economy in the second half of 2009.

"Our US tech market forecast now assumes that the... decline in US real GDP in Q3 2008 will accelerate in Q4 2008 and the first half of 2009 before a weak recovery starts in the second half,” said Forrester Research vice president Andrew Bartels.

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