One in 56 businesses 'will fail'

The recession is forcing more firms out of business

One in every 56 UK business will fail in 2009, according to a report by accountants BDO Story Hayward.

The report estimates that the number of business failures will increase by 59% to 36,000. This compares with 22,600, or one in 87, that failed in 2008.

Construction and real estate firms will bear the brunt of the failures, along with manufacturing.

High-profile retailers Woolworths and Zavvi were among the companies that went into administration last year.

The increasing number of businesses failing has led to sharp increase in job losses.

Official data due on Wednesday is expected to show that the number of people out of work will surpass the two million mark in three months to January.

"The deteriorating economy and expectations of a drawn-out recession has led to a downward revision in the UK outlook and has severely impacted the survival rate of UK businesses," said Shay Bannon, head of business restructuring at BDO Stoy Hayward.

The report estimated 10,300 construction and real estate businesses would fail, while 2,300 manufacturing firms would go out of business.

The estimates include both voluntary and compulsory liquidations.