The first half of 2015 has seen the proportion of North East companies in key sectors facing high risk of insolvency drop by as much as 15%, according to new regional sectoral figures from insolvency trade body R3.
R3 uses research collected from Bureau van Dijk’s ‘Fame’ database of company information to compile a monthly overview of the proportion of businesses in key regional industries that have a heightened risk of entering insolvency in the next 12 months.
And at the mid-way point of the year, the North East’s transport and haulage sector has been ranked as the most financially secure of its peers anywhere in the UK, with a fall of 15% in the proportion of businesses at high risk of insolvency since the start of 2015.
The North East’s technology and IT sector has seen its proportion at heightened risk drop by 8% over the same period, while the region’s key manufacturing sector has recorded a five per cent drop in that time.
On the downside, the North East construction sector is currently only faring better than its peers in Northern Ireland in terms of heightened insolvency risk, while its professional services sector also ranks 11th out of 12, ahead of only London.
However, both sectors have still seen falls over the first half of the year in the proportion of businesses with a raised risk of insolvency, of 1% and 7% respectively.
The only regional sectors not to register improvements in their stability so far this year are the restaurant (no change) and hotel (up 9%) sectors.
Allan Kelly, chair of R3 in the North East and a restructuring partner with Baker Tilly North East, says: “The general sentiment across the regional business community in the first half of the year is undoubtedly as positive as we’ve seen for a very long time, and the findings of our research show how this is being borne out in companies’ everyday operations.
“The confidence that this gives owners and managers across the regional business community helps to create a virtuous circle. Businesses can plan for the future with a greater degree of certainty about their financial security, and may be in a position to invest or expand rather than just doing their best to hang on.
“The enhanced stability in the North East manufacturing sector, which is still absolutely crucial to our region’s economic success, will be very warmly welcomed, as would further similar progress in the second half of 2015.
“While seeing our hotel sector buck the general trend of improvement in the first half of the year isn’t ideal, it’s important to note that the second half is probably more important to businesses of this type, and we’d hope and expect to see improvements between now and Christmas.
“Financial problems can of course still strike a business at any time, and the best way for company owners and management teams to address any issues arising is to proactively seek advice from a qualified source as soon as they become apparent, rather than ignoring them in the hope that they’ll go away.”