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Business failures second highest in UK.

Byline: By Sion Barry Western Mail

The rate of increase in corporate failures in Wales last year was the second highest of any region of the UK, new figures shows.

In 2006 corporate failures in the UK jumped by 10.7% to 20,067, according to the latest figures released by Experian, the global information solutions company with 1,938 more failures than were recorded in 2005.

This is the highest annual number of corporate failures recorded since Experian began reporting in 1997.

In Wales the increase was double the UK average at 22.8%, up from 333 in 2005 to 409. Only London had a higher percentage increase.

However, in the final quarter of 2006 the failure rate in Wales was down 3.1% on Q4 of 2005, bucking the UK average trend with a rise of just over 10%.

Jo Howard, marketing director for Experian's business information division, said, 'Business failures fell in 2003 and 2004, then rose again in 2005 - also by 10.7% - but it looked as though there were signs of improvement in the third quarter of 2006 when business failures fell by 4.1%.

'Despite this, our predictions for an overall increase in corporate failures have sadly rung true.

'The high rise in corporate failures during quarter four of 29.1% was the highest quarterly increase recorded since we started reporting them and has pushed 2006 into the red with an overall increase of 10.7% for the year as a whole.'

The number of business failures in the UK of 5,837 in the fourth quarter of 2006, was also the highest number compared with previous quarters since Experian's records began in 1997, bringing the total for the year so far to 20,067.

Looking at the breakdown of business failure by type during 2006, only receiverships have declined (down 8.6%). In contrast, administration orders (up 56.3%), voluntary liquidations (up 3.7%), compulsory liquidations (up 6.2%) and voluntary arrangements (up 2.5%) have all increased.

The areas most hit by administration orders were London (up 243%), Scotland (up 88%) and Wales (up 83%) during 2006.

Of the 34 industries reviewed by Experian, only 12 recorded a fall in corporate failure in 2006, but 22 recorded an increase. Sectors experiencing a decline in business failures during 2006 included oil (down 91.7%), agriculture, forestry and fishing (down 20.6%), utilities (down 13.9%) and the chemicals industry (down 14.3%).

In contrast, increases in failure were felt right across the board. The largest number of failures in a single sector was in business services - up 24.6% to 4,202. Building materials (up 95%), leisure and hotels (up 20.3%), property (up 23.7%), servicing and repair (63.9%), food retailing (48.2%), printing, paper and packaging (up 34.2%) and other services (up 35.4%).
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Title Annotation:Business
Publication:Western Mail (Cardiff, Wales)
Geographic Code:4EUUK
Date:Jan 1, 2007
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