The North East region has seen a drop in corporate insolvencies, with just 0.08% of all businesses becoming insolvent in June 2013 compared to 0.13% in June 2012.
The latest figures from the Experian Business Insolvency Index is good news for the area, following recent figures from The Insolvency Service showing personal insolvencies increasing in the North East.
The overall business insolvency rate for the UK fell to 0.07% in June from 0.08% in June 2012.
Max Firth, managing director of business information services in the UK and Ireland at Experian, said: “This is good news overall – we’ve already seen several months of low but level insolvency rates.
“The fact that they have come down further indicates that firms are operating with more confidence than in recent years.”
The majority of UK regions showed improvement compared to May 2013. In June 2013, eight of the 11 UK regions showed year-on-year improvement, compared to seven regions in May.
Yorkshire also saw an improvement in year-on-year business insolvency rates, decreasing from 0.13% in June 2012 to 0.10% in June 2013.
The only region to see an increase in insolvency levels was London – increasing to 0.08% in June 2013 from 0.07% in June 2012.
However, Firth warns that falling insolvency levels may not last. He explained: “As businesses start to think about growth and companies start to restock and rehire, the insolvency rate could well go up as cash flow becomes an issue.
“This makes it all the more important for SME’s to understand who they are supplying, how quickly they pay, and thank about what credit options are open to them in advance.”