The Office for National Statistics (ONS) will publish its first estimate of the first quarter’s growth on April 25th. The outcome will be a major factor in the Bank of England’s decision whether or not to expand quantitative (QE) easing next month. Separate data showed factory gate inflation remaining stubbornly high through March.
Business Failure Rates Expected to Rise 10% Over the Next 2 Years
Business failures are set to rise by up to 10% over the next 2 years according to a study by BDO LLP recently.
Some 23,600 businesses collapsed in 2011. This is expected to hit over 25,000 in 2012 and nearly 26,000 in 2013 according to a BDO survey.
The pessimistic forecast is based on lower levels of consumer consumption arising from weaker earnings growth and rising unemployment.
Construction and property, business services and retail and wholesale are the three sectors to suffer the most during 2012.
Technology, media and telecoms and manufacturing are ear marketed as the sectors likely to grow.
A spokesman for BDO said, “Businesses that develop innovative products, distribution channels and a strong customer proposition will gain significant competitive advantage – irrespective of sector. Those who do not respond to the new normal are at a greater risk of falling into difficulty”.
The report also predicts that after 2013 failure rates will start to decline.
Written by Tim Corfield