The number of business failures has hit a three-year low, giving entrepreneurs renewed confidence of a successful 2004, new research has revealed.
The latest quarterly report by Experian found that the 4,063 firms went under during the first three months of 2004, compared with 4,417 over the same period last year.
The number of failures now stand at their lowest level since autumn 2001, when 4,099 companies folded.
Although the number of failures fell overall, nine out of the 35 industries surveyed reported a rise in insolvencies over the first quarter of 2004, with telecommunication firms worst hit.
By contrast, IT companies, food retailers and motor traders all saw a massive decrease in the number of failures.
Failures in Scotland fell by 22 per cent, the biggest improvement in the UK. However, the East Midlands saw 27 per cent more firms go bust last quarter than the previous three months.
Overall, the number of voluntary liquidations, compulsory liquidations and receiverships all fell, although administration orders rose by a surprising 82 per cent over the past three months.
The report gives further evidence of a UK economy emerging strongly from the downturn of the past two years, with business confidence of a fruitful 2004 at sky-high levels.
The insolvency figures are particularly encouraging as, despite the increasing numbers of people willing start up a business, failure rates are still relatively high in UK.
Phil Cotter, manager director of Experian, said that the Insolvency Act has helped many firms avoid going bust.
“Some companies are taking advantage of the new rules, which came into force during 2003 but the increase in administration orders accounts for fewer than half the fall in insolvencies.
“The new rules are designed to make it easier for businesses to get out of financial trouble and banks are no longer able to appoint receiver, they can only appoint an administrator,” he said.
