Insolvency rates for small companies down on last year

Fewer UK firms with between 50 and 500 employees are failing now than at the same time last year, according to new data.

The insolvency rate among firms with 101 to 500 employees more than halved between June 2010 and June this year (from 0.17% to 0.08%), the Insolvency Index by information services company Experian found.

And businesses employing 51 to 100 employees saw failure rates drop from 0.23% in June 2010 to 0.19% last month.

Max Firth, managing director for business information services at Experian, said: "June's data indicates that the UK's business community as a whole is generally stable, however it also points to a change in circumstances for different sized businesses.

"The largest companies have experienced a turnaround in fortunes and now the larger mid-sized businesses are following suit with a significant improvement since last year."

The East Midlands was the region which improved the most (dropping from 0.11% to 0.09%), while the South West had the lowest rate of failures with just 0.07% of its business population becoming insolvent last month.

Businesses in the North West (up to 0.12%) and Scotland (up to 0.1%), on the other hand, both experienced an increase.

The rate of failure for UK businesses as a whole remained the same as last year at 0.09%.

Building materials and building and construction were the industries that fared worst, with failure rates of 0.27% and 0.18% respectively.