The number of companies going bust across Scotland fell by half in January, according to figures published today by credit reference agency Experian.
The firm said there was a total of 41 Scottish business insolvencies during the month, down from 82 in January 2012 – the sharpest decline in failure rates across the UK as a whole.
Experian said the fall in insolvencies continued the “steady downward trend” seen in Scotland last year, although it noted that January tends to be a “slow month” for business failures.
The Scottish failure rate, which equates to 0.03 per cent of the overall business population, was by far the lowest in the UK during January. It compares with 0.08 per cent in the north-east of England and is half the UK rate of 0.06 per cent.
Overall, the number of UK companies that collapsed during the month fell to 1,271, down from 1,376 a year ago and the lowest figure since June 2007.
Max Firth, managing director of Experian’s business information arm, said: “The figures for January 2013 show a marked decline in the insolvency rate, which in fact has hit its lowest level for over five years. This follows a relatively stable 2012, which itself was an improvement on the previous year.”
Most sectors saw a decline in business failures, although the numbers of IT and textiles companies going bust almost doubled, to 69 and 21 respectively, while there was also a big rise in the failure rate for property firms and utilities companies.
Despite tough conditions on the high street, which saw the likes of Blockbuster, HMV and Jessops slide into administration in January, the number of non-food retailers that collapsed during the month dropped to 81, down from 104 a year ago, but there was a slight rise among food retailers.
With car sales growing strongly, the number of motor traders going bust halved to 27, according to Experian. The Society of Motor Manufacturers and Traders recently raised its sales forecasts for the coming years after the number of new car registrations grew 11.5 per cent to 143,643 in January.
Medium-sized firms saw the biggest fall in insolvency rates during the month, although the picture for those with fewer than ten staff was broadly flat and there was a slight increase in the failure rate among firms employing between 101 and 500 people.
Firth said: “High-profile insolvencies so far this year show that it is still a challenging climate and businesses across all sector and sizes need to adapt to changes in their trading environment.”