Company failure rates during the first three months of 2012 are nearly 20 percent lower than the same time period two years ago, research finds.

Company failure rates during the first three months of 2012 are nearly 20 percent lower than the same time period two years ago, research finds.

The number of insolvencies in the first quarter (2012) is also 3.7 per cent lower than the same period last year (2011), according to the Graydon UK Insolvency Predictor.

Furthermore, company failures in the first quarter this year are down by nearly 5 per cent (4.4 per cent) compared with the last three months of December 2011, suggesting that company liquidations will continue to decrease this quarter.

Gordon Skaljak, external spokesperson for Graydon UK says, ‘The good news is we are seeing a decrease in the number of business failures. However, although the threat of a double dip recession may appear to be receding, it is still important for businesses to identify both opportunities and risks if they want to increase their businesses efficiency and bottom line growth.’

The number of insolvencies in the manufacturing sector has decreased slightly following the peak at the end of last year. According to a recent UK Trade and Investment report, the UK is one of the top manufacturers in the world and government initiatives such as ‘Made in Britain’ and ‘Going for Growth’ are targeted at helping production businesses in order to rebalance the economy.

Skaljak says, ‘Whilst support for small and medium-sized manufacturing firms exists, in the current economic climate, access to finance is still a challenge for all businesses. Many firms find it difficult to keep their heads above water, putting their suppliers on shaky ground.’

He adds that businesses must ensure that they prevent themselves from the damage caused by late and non-payments.

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