New research has shown that the North East economy ended 2015 on a positive note with almost all its key industries now sitting in the top half of national business stability tables.Insolvency trade body R3’s latest figures on the numbers of businesses around the UK that have a heightened risk of entering insolvency in the next year found that the North East’s representatives ranked in the top four in six of the ten key sectors that it covers.
The North East transport/haulage sector has recorded the lowest such risk of any of the 12 UK regions for the tenth month in a row, while its restaurant sector is sitting on top of the list as the most stable of its UK peers for the second consecutive month.
The region’s agriculture industry ranks third in the national list, while the North East retail, hotel and pub sectors are all sitting in fourth place in their respective tables.
The North East technology and IT sector is ranked fifth of its peers around the UK, while the professional services and manufacturing sectors are ranked sixth, although the proportion of businesses in all of them with a heightened risk of insolvency is below the national average.
The North East construction sector is the one industry bucking the positive trend and currently sits at the bottom of its sectoral table, although it has registered slight improvements in business stability in the last two months.
Elsewhere in the R3 research, the North East retail sector showed signs of a decent Christmas trading period, with a month-on-month drop in its heightened insolvency risk of almost two per cent, while manufacturing also recorded a similar level of improvement and the professional services sector improving by more than six per cent.
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 partner with RSM, says: “There’s no doubt that conditions are still tough for many regional businesses, and a return to the sunlit uplands is still a long way away, but having the North East positioned relatively strongly against its UK peers does provide some clear grounds for optimism for 2016.
“Seeing a sustained improvement in the regional retail sector at a time of year when, during the recession, many well-known names finally ran out of steam is very encouraging, and our retailers will now be hoping that they can sustain these figures during what is traditionally the sector’s most challenging part of the year.
“The North East’s professional services has been one of the region’s economic success stories during 2015, and the improvement in its fortunes perhaps reflects the wider confidence that’s been felt over the last 12 months, with a greater number of businesses becoming more active and needing specialist support in realising their development ambitions.
“Even in an improving climate, issues can arise for any business in any sector at any point, and being proactive in seeking advice from a qualified source such as an R3 member on how to resolve anticipated or actual financial problems is the most likely way of finding a workable solution to them.”