Companies operating in a range of North East industry sectors are building on confident starts to 2015 as the insolvency risks they’re facing continue to drop.According to the latest analysis by insolvency trade body R3, the proportion of North East companies with a higher than normal risk of insolvency has fallen over the last three months in nine of the ten key industry sectors that R3 monitors.
The North East transport/haulage sector has recorded the lowest such risk of any of the 12 UK regions for the third consecutive month, while the region’s retail, manufacturing, restaurant, technology & IT and hotel sectors all maintained positions in the top half of the UK-wide tables for their respective industries.
On the downside, the North East construction sector is still only faring better than its peers in London and Northern Ireland according to the research, while its professional services sector ranks ahead of only London.
However, both sectors have seen falls over the last three months in the proportion of North East therein with a higher than normal risk of insolvency.
Every month, R3 uses research compiled from Bureau van Dijk’s ‘Fame’ database of company information to track the number of businesses in key regional sectors that have a heightened risk of entering insolvency in the next year.
Allan Kelly, chair of R3 in the North East and a restructuring partner with Baker Tilly North East, says: “While there are clearly no grounds for North East businesses to become complacent about the future, the economic recovery does appear to be having an impact on stabilising regional industry sectors that, not so long ago, were facing significant insolvency risks.
“It’s good to see a high proportion of our industries at least holding their own against their peers from across the UK, if not outperforming them, and seeing the manufacturing, retail and technology sectors maintaining decent positions is encouraging for the health of the overall regional economy.
“There’s clearly far more progress to be made, especially in sectors like construction where the impact of the financial downturn was especially severe, but there is at least a good degree of encouragement for the future on which our businesses can build.
“The best way for company owners and management teams to address financial concerns is to proactively seek advice from a qualified source such as an R3 member as soon as they become apparent, rather than ignoring them in the hope that they’ll go away.”