UK businesses shun slowdown with growth in sales and fall in company failures
Sales across UK business rose by 1.5% in the last three months, the equivalent of £99.8bn, according to the latest figures from the Creditsafe Watchdog Report. This follows two consecutive quarters in the year to date of falling sales and rising company failures.
The quarterly Watchdog report, which analyses financial data across 12* UK business sectors, revealed that the IT, Utilities and Transport & Logistics sectors had the strongest growth in sales over the last three months, with Cognizant, Hermes, Centrica and Total Gas & Power listed among the fastest growing companies. Ten out of 12 sectors analysed reported an increase in sales, with only the Banking & Finance and Manufacturing sectors experiencing a fall (-0.4% and -0.3% respectively).
The number of UK businesses falling into administration over the last three months also dropped, down 2.2% to 4,721. However, when compared with the same quarter 12 months ago, company failures have shown a significant increase of 19.6%.
“Year to date, company failures have remained a consistent negative trend across the UK economy,” said Chris Robertson, UK CEO at Creditsafe. “Over the summer months, however, we’ve seen signs of recovery, with sales, the number of active companies and salaries all on the rise. This could be down to more cautious business planning or pre-emptive Brexit business strategies that have been put in place and are now showing positive results. Time will tell.”
The Watchdog report also indicated a mismatch in bad debt across UK business sectors, with bad debt owed to businesses increasing by a third (30.3%) to £245.6m but bad debt owed by businesses to their supply chain falling by 58.6% to £829.8m – the lowest it has been in 2018.
The Retail industry enjoyed a significant improvement in debt owed to the sector this quarter with a fall of £51.5m, while the Construction sector saw the amount it owed to suppliers rise by £13.7m on the previous three months. The Manufacturing sector saw the biggest rise in bad debt following the collapse of Flow Group UK, which left behind £47.9m in unpaid supplier invoices.
* Farming and Agriculture, Construction, Banking and Financial, Hospitality, IT, Manufacturing, Professional Services, Retail, Sports & Entertainment, Utilities, Transport and Wholesale.
Creditsafe’s Q3 2018 Watchdog Report is available for download here: https://www.creditsafe.com/gb/en/more/hub/watchdog-reports.html