The closing months of 2009 will see an increase in business failures, according to a new business index from Bibby Financial Services.

The index shows that 25% of firms predict recruitment will be the first to recover, the most positive response of all industries surveyed , while one in 10 claim their business is doing well and has even benefited from the recession.

But a third of firms (30%) say the current market continues to be tough, and are either just surviving or having to make cuts to rationalise operations.

Edward Winterton, Bibby Financial Services recruitment finance specialist, says: “As is highlighted in the Business Factors Index, October is always a busy month for recruiters in the build up to Christmas.

“While the rest of 2009 should see a broad uplift in trends as companies re-stock and find ways of capitalising on the downturn - such as taking on the supply chains of failed competitors – it’s unlikely the real problems will emerge until Q1 of 2010 and perhaps even Q2 for the recruitment sector.  Once this is out of the way, however, sustainable economic growth is more than likely.”