Businesses defy UK failure trend

Business closures were down amid Corus cutbacks

Wales saw the second highest recorded fall in the number of failing businesses during 2001.

A survey by business analysts Dun and Bradstreet revealed the south east (7.4%) had the biggest drop in liquidations and bankruptcies.

Wales (6.7%) also bucked the economic outlook, causing surprise among analysts.

Wales benefited from a decline in bankruptcies

The figures are in sharp contrast to Dun and Bradstreet's report 1999, when Wales topped the list of regions with failed businesses (26%).

Fears that businesses would be hit by the 11 September US terrorist attacks were not realised, as the UK-wide business failure statistics fell by nearly 1%.

Across England, Scotland and Wales, 40,532 firms went into liquidation or were declared bankrupt last year - down from 40,847 in 2000.

But in London, the number of failing businesses increased by 8.3% and Scotland saw a 6.6% rise in businesses getting into trouble.

The decline in Wales will encourage business leaders.

The combination of a stable economy and low interest rates has made it easier for businesses to plan ahead

Philip Mellor, senior analyst, Dun and Bradstreet

D&B senior analyst Philip Mellor said: "It's come as a slight surprise that they (the number of failures) have gone down."

He added: "We have had a climate of low interest rates, and the combination of a stable economy and low interest rates has made it easier for businesses to plan ahead - and they haven't had many shocks.

"Over the last three to four years, there has been a more balanced representation of businesses in Wales."

That, the analyst said, meant the closure of many other businesses was offset.

But Mr Mellor forecast a more gloomy picture for 2002, with the number of business failures set to increase.

During 1999, Wales saw 1,697 firms going under, a rise of a quarter on the figure for 1998.

The highest business failure rates recorded by Dun and Bradstreet were in 1992, at the height of the last recession.

At that time, 16,000 businesses went bust during the summer months.