Business failures in the transport and communications sector were lower in the second quarter of the year compared to the first, according to business information provider Equifax.
Although year on year failures were still up, Neil Munroe, external affairs director at Equifax, said this did not show the more relevant picture of how UK businesses may be starting to recover from the sharp downturn which kicked in from mid last year.
“Undoubtedly the recession is still having an enormous impact on business fortunes with many organisations simply unable to survive against the onslaught of falling sales and restricted access to funding to cover the cash flow gaps. But our figures seem to suggest that we could have hit the bottom by the time we reached the end of the second quarter and in some areas there is an improvement, albeit small.
“Of course the next question has to be whether we are going to see the sustained upturn of a V shaped recession or whether this is just a small pre-summer blip and failures increase again, more typical of W shaped recession.”
The Retail sector has shown the greatest improvement with an 11.8 per cent quarter on quarter drop in failures. The Wholesale sector has also improved quarter on quarter with a 5.1 per cent drop in businesses going under and a 4.1 per cent drop in failures seems to suggest the Construction sector is also starting to recover. Transport & Communications saw a four per cent drop in failures quarter on quarter.