New data released by Creditsafe, examining the rate of company failures across 12 UK business sectors has revealed that over a third (33.4%) of companies in the Hospitality sector failed in Q3 2018. Across the Hospitality industry – inclusive of hotels, restaurants and bars – there were 591 company failures, compared to 330 in the same time period in 2017. The top three company failures by size were Gioma UK, Cau Restaurants and Villandry Foodstore Restaurant.
The Creditsafe Insolvency Index ranks sectors according to the percentage of insolvencies each has suffered compared to the number of active companies during the third quarter of 2018.
The Construction sector came in second place on the Index with an insolvency ranking of 22.5%, which reflected 943 company failures for the sector, while Manufacturing was in third with 430 failures (22.3%). The lowest rate of failure went to the Farming and Agriculture sector, which only had 5.3%, equal to only 17 company failures.
The data showed that two thirds of the sectors analysed had over 10% of their active companies fail. In addition, three quarters of the sectors experienced a higher rate of failure in the third quarter of 2018, compared to 2017. The sectors with the highest jump compared to last year reflected the sectors that had the highest rate of failure overall – Hospitality, Construction and Manufacturing.
Chris Robertson, UK Managing Director of Creditsafe, said “Our insolvency index has produced interesting results that show the pressure that all sectors across the UK economy are under. Clearly, company failures in some sectors hit the headlines more than others, but this data shows that the rate of failure in the hospitality, construction and manufacturing industries in particular is cause for concern. This is a reminder for companies to stay on top of their own finances and heed any warning signs, while also staying vigilant across the supply chain by carrying out company credit and health checks.”
Turning to other industries, despite the Transport and Logistics sector showing a failure rate of 12.0% in Q3 2018, this was one of the best performing sectors compared to last year with the rate of failures falling by 7.0%. In addition, Professional Services had the largest number of active companies at 1.4m, and the highest total number of failures at 1,294. However, this equates to a failure rate of 9.5%, which positions the Professional Services sector as one of the better performers.
The sectors examined were Farming and Agriculture, Construction, Banking and Financial, Hospitality, IT, Manufacturing, Professional Services, Retail, Sports & Entertainment, Utilities, Transport and also Wholesale.
The Creditsafe Insolvency Index calculates the rate of failure for each sector based on the number of active companies, compared to the number of failures, in each sector in the third quarter of 2018.
|Q3 2018 Insolvency Index|
|Sector||% of company failures|
|Hospitality, Hotels, Restaurants & Bars||33.40%|
|Utilities & Waste Management||17.40%|
|Transport & Logistics||12.00%|
|Banking & Financial Activities||11.10%|
|Sports & Entertainment||8.30%|
|Farming, Agriculture Forestry & Fishing||5.30%|