The financial state of the IT sector continued to improve with a drop in insolvencies last month accompanied by signs that financial strength to ride out the remaining months of the recession is also returning.
According to the latest figures from Experian’s Insolvency Index the technology sector saw a 2.5% decrease in the number of companies failing last month compared to the same month last year with 77 hitting the wall.
But in Experian’s measure of financial strength the IT sector rose to 83.35% from 79.74% in October last year.
Overall across the entire economy the number of insolvencies increased slightly year-on-year but financial strength is returning.
“Throughout 2008 the average financial strength score had been seeing a downward trend, but 2009 has seen a reversal. The financial solidity of UK businesses has been improving over the year," said Rolf Hickman, managing director of Experian.
He said that the insolvency rate had remained stable since July until the slight rise last month but with companies feeling stronger added: “We could see insolvencies maintain a low level and even start to fall."
Across the entire economy those companies with 500 plus staff seem to be recovering quicker than smaller companies with insolvency rates highest among those firms with 11 to 50 staff.