Construction sector recovers from difficult start to minimise business failures across the year according to 2006 says Equifax Business Failures Report.

Construction sector recovers from difficult start to minimise business failures across the year according to 2006 Equifax Business Failures Report. The start of 2006 saw the UK Construction sector experiencing a rise in business failures of 8% compared to the same period in 2005. However, leading credit information specialist Equifax now reveals in its 2006 Business Failures Report that the year ended on a better note with just a 1.1% increase in failures for the sector.

The Construction sector even benefited from a steady performance in the last quarter of 2006 with business failures increasing by just 2% over the same period last year.

However, these improved figures should not lead to complacency urges Neil Munroe, External Affairs Director, Equifax: 'Companies of all sizes should protect themselves by implementing risk management procedures including basic credit checks.

'Many small businesses in the construction industry in particular are more vulnerable to the impact of bad debt and fraud yet many fail to take even the most basic steps to protect themselves.

Even the very small businesses can benefit from the latest online tools allowing them to check a customer or prospect's current credit worthiness instantly so that they know exactly who they are doing business with.' Also in good shape across 2006 was the Service sector with 7.7% fewer business failures than in 2005 according to the Equifax Report.

And the last quarter of 2006 suggests that this positive trend could continue in 2007, with a 4% reduction in failures year on year.

Other areas of UK business and industry also came out of 2006 with creditable performances.

The Manufacturing sector showed improvement across the year with an overall drop in business failures of just over 2% on the year compared with 2005.

But a note of caution was sounded by Quarter 4 figures where business failures jumped to 11.3% year on year.

The Wholesale sector failures over the year only rose by 4.9% compared with 2005.

However, even here the final quarter was ominous with failures up by 6.6%.

The Transport and Communications sector fared better with an increase in failures of just 4%.

However, things weren't so positive in the Retail sector.

Seasonal trading patterns may well have been the underlying cause of a much poorer performance on the UK High Street where a tougher story was told.

The Retail sector recorded the highest level of business failures across 2006.

The underlying picture painted by the 2006 Business Failures Report suggests that despite the hype of increased retail spending many shoppers were in fact being 'more picky' about where they buy demonstrated by the rise in online spending.

The increase in business failures across the Retail sector for January to December 2006 was up 17.2% compared to the same period in 2005.

The story was only slightly improved by the news that the final quarter of 2006 showed a better year end with a lower increase in failures of just 11%, year on year.

'It is vital that businesses of all sizes follow best practice basics by putting in place risk management procedures and make best use of the latest online tools that allow fast checks to be carried out on prospective customers and partners,' concluded Neil Munroe.