Cautious welcome as business failures fall to near pre-credit crunch levels

BUSINESS failures in Scotland in the past three months fell by a third compared to the same period in 2009, the most resilient performance in the UK according to figures released yesterday.

The drop of 9.6 per cent from the second to the third quarter north of the Border was also better than the UK average.

The latest Equifax Business Failures Report revealed a UK-wide fall of 13.4 per cent in the number of businesses going bust in July to September, compared to the same period in 2009.

The number of failures in the latest quarter was similar to levels seen in late 2007 and early 2008, when the credit crunch first took hold.

Nic Beishon of Equifax said while the figures were encouraging, businesses still needed to protect themselves through measures to tackle bad debts and late payments.

"There is no question that the economy is still fragile, and there is much anticipation about the impact of the government spending review and the VAT increase in January," he cautioned.

The wholesale sector saw the biggest falls in business failures, with manufacturing and services also recording steep falls. The transport and communications sector was the worst quarter-on-quarter performer with a 13.6 per increase in failures.

Earlier this week, figures from accountancy giant Deloitte showed a 36 per cent fall in administrations across the UK so far this year.