The level of UK business insolvencies fell more than 12 per cent for the whole of 2010 compared to 2009, as firms managed to survive the economic climate.
A report from business information provider and credit reference agency Equifax shows that corporate insolvencies decreased from 26,000 in 2009 to 23,000 in 2010.
The study also states that the level of corporate failures dropped 8.4 per cent year on year for the fourth quarter of 2010.
While the report paints a more positive picture for UK plc in 2011, it also reveals a 6.4 per cent rise in business failures during the last three months of 2010 compared to the third quarter.
Neil Munroe, external affairs director at Equifax, said: “What we have seen throughout 2010 is a steady drop in the number of organisations failing. Pay freezes and tight control on invoice payments were reported consistently throughout the year.”
He added: “It appears that there has been a clear focus on cost control and cash flow management which has aided survival.”
Equifax’s Business Failures Report also shows the regions that are recovering and those still struggling in the aftermath of the recession.
Scotland, for example, saw the highest increase in failures from the third to the fourth quarter of 2010 – at 32.9 per cent.
The level of business failures in London increased from 16 per cent, from 1,326 in the third quarter to 1,538 in the fourth, while the west Midlands also suffered, with insolvencies rising from 654 to 787 in the final three months of the year.
Equifax’s report attributes these rises to a number of companies being wound up at the end of their business year.
The regions that bucked the trend of quarterly rises were the east Midlands, with a 23.4 per cent drop quarter on quarter; the north west with a 7.6 per cent fall and the south west with a 2.1 per cent decrease.
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