In general fewer businesses are failing this year compared with last. However, while some sectors are doing well others are faltering.
According to the latest figures from Experian, the retail and leisure sectors are recovering despite a poor start, a very wet summer and rising interest rates. The first half of the year was poor with a 16.3% increase in insolvencies. But things picked up in the third quarter with 15.5% fewer Hotel & Leisure businesses failing and 9.6% fewer Retailing businesses (Food and Non-food) becoming insolvent than in quarter three 2006.
However, it is bad news for the Business Services sector. This is one of 11 sectors that has shown an increase in insolvencies over the last quarter and suffered the biggest increase (accounting for almost a quarter of all insolvencies). Others include Banking and Financial Services and Post & Telecommunications.
The Banking and Financial services were, according to Experian, struggling even before the credit crunch and Northern Rock debacle.
The failures in Post & Telecommunications is interesting because the national strike by the post office workers should have created opportunities for independent businesses in this sector but clearly hasn’t.
What does this all mean for Brighton & Hove? Well, it is good news for the retail and leisure industries. These sectors are strong in Brighton & Hove and also act as a barometer on consumer spending and confidence in the economy and this could be an encouraging sign.
But Brighton & Hove has an even stronger dependence on the Banking and Financial and Business Services sectors with these accounting for nearly 45% of all businesses in Brighton & Hove. This compares with just under 20% of businesses in the retail and wholesale sectors and nearly 12% in tourism.
The figures may just represent a blip and be of no serious consequence but if it is the beginning of a new trend then we do need to sit up and take notice.
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