Total failures in July 2008 rose by 29% compared to the same month last year. Equifax is therefore urging companies to batten down the hatches and put in place tactics to weather the storm.
“The Transport and Communication sector was the worst hit, seeing a substantial 59% year on year increase in failures in July,” explained Nic Beishon, head of commercial solutions for Equifax. “With the price of fuel spiralling ever higher many businesses are starting to feel the pinch as overheads continue to soar. The Construction sector also saw a high year on year increase in failures at 57%. This provides clear signs that the property downturn is having the expected impact on the industry.
“The Manufacturing sector saw a 39% rise in July 2008 compared to July 2007, which comes as no great shock following the recent ONS figures on manufacturing output which decreased by 0.8% in the second quarter of 2008 compared with the first quarter.”
The high street spending slowdown contributed to a 33% rise in business failures within the Retail sector. Low consumer confidence and less spending probably contributed to this rise and in the Wholesale sector, failures rose by 26% year on year for the month of July. The Service sector saw the smallest increase year on year, at just 12%.
