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To: ms.smartest.person who wrote (2244)	12/31/2002 12:20:44 AM
From: ms.smartest.person	Read Replies (1) \| Respond to of 5140

New warning after business failures reach eight-year high By Matthew Jones Published: December 30 2002 4:00 \| Last Updated: December 30 2002 4:00 The number of business failures has risen to its highest level for eight years and could increase even further in the next six months, according to a study by D&B, the business information group. The findings are in sharp contrast to a fall in the rate of bankruptcies and liquidations in the previous two years. D&B calculates the number of corporate failures in 2002 at almost 43,500, a rise of 7.2 per cent compared with a year ago and the highest level since the end of the recession in 1994. The worst hit region was the south-west, where failures increased by 15.2 per cent, followed by the West Midlands, south-east and London, where the number of failures rose by 13.2 per cent, 12.3 per cent and 7.9 per cent respectively. Philip Mellor, senior analyst at D&B, said the number of business failures was likely to rise to about 45,000 in 2003 because of continuing poor economic conditions in Europe and the Far East and a slower-than-expected recovery in the US. "All sectors are at risk. We will see more big companies cutting back on the number of people they employ and this will have a knock-on effect for small and medium-sized business failure rates," he added. Mr Mellor said Britain was better able to cope with an economic downturn than in the early 1990s, when failure rates reached 60,000 a year. But he said entrepreneurs were being forced by the government to spend too much time dealing with red tape and bureaucracy rather than running their businesses efficiently. Earlier this year Experion, a Nottingham-based re-search group, said business failures were highest in the information technology, engineering and construction sectors. Ernst & Young, the accountancy firm, has said that the number of profit warnings in the UK this year could total more than 300, though this would be an improvement on 2001, when there were 500 warnings in the wake of September 11. The D&B figures, which echo official data published in the summer, show that up to the first half of December 43,458 businesses collapsed, of which 18,628 were liquidations and 24,830 were bankruptcies. Failures in the east Midlands and the east fell by 3.8 per cent and 0.3 per cent respectively but Mr Mellor said both regions were likely to experience a rise in bankruptcies and liquidations in the new year. news.ft.com