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IT failure rates stable as health of SME sector improves

Simon Quicke

The number of IT firms hitting the wall has stabilised with the number of insolvencies last month dropping slightly year-on-year.

The latest figures from Experian indicate that 51 IT firms hit the wall in April, down 8.93% on last year, and the level of the business population failing remained stable at 0.05% year-on-year.

The worst performing sector of the economy was business services, which saw a 9% increase in insolvencies to 419 last month, followed by building and construction and property as the weakest verticals/

Over the economy as a whole the number of failures dropped with the general health of the SME sector improving, particularly amongst those firms with 50 employees or less.

In terms of the geographic spread of failures the Midlands and Wales showed the greatest improvements and the North East was hardest hit with the highest rate of insolvencies.

"With business failure rates and financial strength fluctuating across different regions and sectors, it is especially important that any organisation extending credit to or relying on other businesses for goods and services is able to understand the level of risk associated with their commercial partners," said Max Firth, managing director of business information services at Experian UK and Ireland.


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