IT insolvencies tumble in February 2011


IT insolvencies tumble in February 2011

Alex Scroxton

The IT sector showed more solid evidence of the recovery during February, with sector insolvencies down 48% year-on-year, according to the latest Experian Insolvency Index.

Just 39 businesses went to the wall in the second month of the year, down from 76 in February 2010, said Experian.

This represented 0.04% of the total sector, which has one of the strongest UK financial strength scores - an Experian metric that predicts the likelihood of a business failing in the next 12 months - of 83.97 out of 100.

As a whole, the IT industry outperformed the UK, which saw total insolvencies down 12.5% from 1,934 in February 2010 to 1,605 in February 2011.

Businesses in Scotland saw the greatest rate of improvement, with an insolvency rate of 0.06% in February, while Wales saw the biggest increase in its insolvency rate going from 0.08% to 0.11%.

Yorkshire was the worst performing region, with a rate of 0.13%, while London firms had the lowest financial strength score.

Said Experian pH managing director Max Firth: "The period of stability for businesses in the Uk continues to head in a postivie direction overall. However, whilst smaller and larger companies are improving, insolvency rates for midsized companies continue at the same rate month-on-month.

"This could mean that in more challenging times they fall victim to being too large to be flexible and too small to rely on a solid, established business structure and long-term contracts," he added.

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