The credit crunch has taken its toll on businesses, with new figures revealing yet another rise in the number of firms being forced to close their doors.
The research, by business information company Equifax, said the number of business failures rose by almost 10% compared to the same period last year.
The group warned businesses to expect a tough year ahead, particularly the transport and communications sectors, which saw their failure rates increase by more than 16% in the last three months.
Business failures rose by 11% in the construction sector, with retail seeing a rise of almost 10% and failures in the services sector rising by over 8%.
The North of England has been hardest hit, with a rise of 21.4% in the North West, and 20.3% in Yorkshire and Humberside. The South East saw a drop of 0.4% compared to the same period last year.
“This is a bad start to the year for most business sectors across the country, with the credit crunch showing no signs of abating,” said Neil Munroe, external affairs director of Equifax.
“Banks are going to look at businesses just as closely as they are looking at individuals, making it harder for firms to get funding to pay off debts and bolster cash flow.
“With this in mind, we urge companies to protect themselves from bad debt by conducting rigorous credit checks, supported by ongoing monitoring of customers’ and suppliers’ financial status,” he said.
© Crimson Business Ltd. 2008
