Scottish businesses holding up better than UK

Published on Thursday 9 April 2009 20:47

THE number of business failures in Scotland has grown less than in other areas of the UK, new figures yesterday suggest.

In the first quarter of 2009, businesses failures in the UK soared 35 per cent, but in Scotland, the figure rose by just under 19 per cent, according to Business Failures Report.

Meanwhile, 25.6 per cent fewer businesses north of the Border failed in the first quarter, compared to the last quarter of 2008 – while the UK figure was 3.3 per cent higher.

Neil Munroe, external affairs director for Equifax, said: "It is hardly surprising that, year on year, the level of failures has increased so significantly.

"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."

The construction sector witnessed the greatest level of increase, year on year, in failures, with 65.2 per cent more businesses folding in the first quarter of 2009, compared with a year earlier.

The manufacturing and retail sectors also recorded significant year-on-year increases in failures at 44.4 and 44.8 per cent respectively, but the service sector appears to be more resilient, nursing a 15.5 per cent rise.

Munroe added: "Whilst the comparison between quarter four 2008 and the first three months of this year show some slowing down of the very high levels of failures we were seeing last year, it is clear that more action continues to be needed from government and the banks to inject funds into the economy as a whole, both to encourage consumer confidence and help businesses with important cash flow support."