Business failures are rising faster in the South West than the national average as the tough market conditions and weak economy take their toll.
The latest figures from business information provider Equifax show the number of businesses going bust in the region climbed by 22.5% during the three months to the end of September compared to the same period last year.
While that is slightly higher than the national increase of 20.3%, quarter on quarter the South West failure toll, at 16.5%, is alarmingly much higher than the national figure of 7.8%.
This higher figure could represent the region’s large number of small businesses which do not have the reserves of their larger counterparts to survive worsening trading conditions.
Across the UK a total of 7,994 businesses failed in the third quarter – the highest number for more than 12 months and not far short of the peak of 8,874 in the second quarter of 2009.
Hardest hit have been retailers with a worrying 41.8% year-on-year increase in failures. The construction industry is also finding conditions challenging with a 22.6% rise. in companies going under.
The transport and communications sector, however, is showing some resilience with a 5.4% quarter-on-quarter drop.
Equifax director Mark Nuttall said: “This new report continues the disappointing trend which started in the summer.
“The South West has been hit hard, which confirms that businesses need to remain cautious. The reality is that businesses are continuing to find it much harder to keep their heads above water as the economy fails to pick-up.
“The failures in the retail sector in particular reflect the lack of consumer confidence being reported from the high street.”
