New economic data has found that the North East construction sector has dropped to the bottom of national rankings for business stability.But elsewhere in the latest sectoral research by insolvency trade body R3, there’s plenty of more positive news for the regional economy.
Despite the proportion of regional construction businesses with a higher risk of going into insolvency in the next year falling slightly since the start of 2016, to now stand at 31%, improvements in its peer sectors in London and Northern Ireland have seen them overtake the North East to leave it at the foot of the rankings that R3 compiles across the 12 UK regions.
Every month, R3 uses research compiled from Bureau van Dijk’s ‘Fame’ database of company information to track the number of businesses in ten key regional sectors that have a heightened risk of entering insolvency in the next year.
On the upside, the North East transport/haulage sector has been ranked as the most stable of its peers across the UK for the 13th month in a row, while the region’s restaurant sector is once again top of its national rankings for a fifth consecutive month.
The regional agriculture, retail, pub and hotel sectors are all in the top four place in their respective tables, while the North East construction and hotel industries are the only ones of the ten regional sectors that are above the national average in terms of insolvency risk.
Neil Harrold, chair of R3 in the North East and a partner with Hay & Kilner Solicitors, says: “The North East construction sector has actually seen a small but consistent improvement since the start of 2016, and the first quarter is traditionally the most challenging part of the year in this industry, so these latest figures shouldn’t cause too much panic, but no-one likes to come bottom of any list, especially when it’s comparing your performance with that of your peers and potential competitors.
“The regional construction industry is continuing to slowly recover from an extremely difficult few years, and the sheer volume of commercial and residential development projects that you see today around the North East’s major cities show that there’s no shortage of infrastructure investment being made, which creates opportunities for both main contractors and supply chain businesses.
“The better news across many other regional sectors is very welcome, and fits with the generally steady progress that the North East has made over the last couple of years.
“The region’s hospitality industries have maintained a stable high position in their respective rankings, and with better weather hopefully just around the corner, they’re in a good position to capitalise on the increasing numbers of people that will visiting the region or spending more time out and about.
“Business owners need to be aware that financial issues can crop up in any sector at any point, and to maintain clear oversight of matters such as cash flow, forward order books and their customers’ business performance to have the best possible chance of seeing and rectifying problems before they become too serious.”