Business failures have fallen to their lowest level in two years, as business-to-business activity is set to overtake consumer spending as the mainstay of the British economy.
The latest BDO Stoy Hayward Industry Watch, the only report to predict total business failures by sector, reveals that the number of companies collapsing fell to 4,130 in the third quarter of 2003. By the end of 2003, a total of 17,900 firms are estimated to have folded, an improvement on the 19,928 business failures in 2002.
In 2004, a dip in consumer spending combined with sluggish economic growth will push the number of companies going bust to exceed 19,200, as firms that have borrowed heavily and significantly rely on consumer spending are pushed over the edge. However, according to Industry Watch, this increase is not a permanent trend with some 18,000 businesses predicted to fail in 2005.
