500 firms lost in three months

More than 500 businesses in the West Midlands have gone bust in just three months, new insolvency figures revealed today.

This is an increase of nearly a third on the year before and paints a gloomy picture for the region as the economic downturn deepens.

So far this year 1,494 businesses in the region have failed, which is over five a day, according to the figures released by global information services company Experian. Worst hit areas are manufacturing and construction.

The latest insolvency analysis showed there were 16,591 UK business failures in the first nine months of 2008, an increase of 22 per cent on the same period in 2007.

In the last two months alone there have been 5,957 failed businesses in the UK. Key sectors affected included business services with 1,284 insolvencies in the third quarter, taking the annual total for the sector to over 3,550 failures.

In the building and construction sector there were 537 failures during the same period, and in property there was 434 failures seeing its annual figure reach 891 failures, more than double the amount in 2007.

Businesses now need to be careful about their margins if they are going to survive according to Tony Pullen, managing director of Experian's business information division.

He said: "Businesses, now more than ever, need to know who they are dealing with and that their customers and suppliers have the means to pay.

"Given the difficult trading conditions and rise in insolvencies, it is important that businesses take the right steps to safeguard the supply of their goods and services.

"The best approach is to continually monitor customers' and suppliers' commercial integrity against financial performance, credit risk information and payment behaviours. Access to this level of insight provides the intelligence to help businesses manage their exposure to risk."

Information group Equifax claimed earlier that the region had so far avoided a major downturn.