UK business insolvencies dropped 13% year-on-year in June, according to the latest Insolvency Index from Experian.
1,771 UK businesses failed in June 2010, 13.4% fewer than in June 2009, when 2,044 firms became insolvent, said the report. As a result, the year-on-year insolvency rate fell from 0.10% to 0.09% in June.
At 0.14%, the North East had the highest insolvency rate of the regions in June, with Yorkshire close behind at 0.12%. In contrast, businesses in the South West saw a UK low of 0.07%, while Greater London had an insolvency rate of 0.08%.
Smaller companies with 11-25 employees saw the greatest year-on-year reduction in the insolvency rate (from 0.29 percent in June 2009 to 0.20%), while the largest businesses with 501 plus employees suffered the most since last year, seeing the insolvency rate double from 0.07% in June 2009 to 0.14%.
Non-food retailers saw insolvencies drop from 117 in June 2009 to 96 in June this year.
The overall financial strength score of UK businesses also improved, from 80.83 in June 2009 to 80.66 in June this year. As well as being the region with the lowest insolvency rate, the South West also held the highest financial strength score at 82.50. The financial strength score predicts the likelihood of a business failing in the next 12 months, with 100 being the least likely to fail and 1 being the most likely.
Rolf Hickman, managing director of pH Group, an Experian company, said: "June's data indicates that the UK's business community as a whole is stabilising, however it also points to the existence of a north versus south divide. Businesses in the north of England seem to be faring slightly worse than their southern counterparts across all industry sectors.
"Although the data hints at some improvements, individual organisations are impacted in different ways. It is vital for businesses to understand the circumstances of those they are doing business with and the risks they could expose them to."