North East industries old and new are making welcome progress against their peers around the UK, while the region’s leisure industries are staying well ahead of the curve.
According to insolvency and restructuring trade body R3’s latest business stability rankings, the North East agricultural sector is the top performer in its industry table, which compares the proportion of agricultural firms in the North East considered to be at higher than normal risk of insolvency with their peers in the other 11 regions of the UK.
The North East agricultural sector has moved up from fifth to first place in just four months in its table, with 28% of agricultural firms in the region at elevated risk of insolvency, with the figure for the UK overall standing at 33.4%.
The North East’s technology and IT sector is also moving up its sectoral rankings, rising from eighth to fourth place over the same period, and is now just 0.1 percentage point lower than the UK, at 45.1% (UK: 45.2%).
The North East’s restaurant sector remains at the top of its sectoral business stability table, with 26.6% of firms considered to be at higher than normal risk of insolvency. This is over a percentage point lower than the nearest contender (Northern Ireland, on 27.9%) and well below the overall UK figure of 30.2%.
The North East pub and hotel sectors are in second and third places in their tables, at 27% and 23% respectively.
Overall, regional firms in eight of the 11 key industries that R3 monitors currently have a better rate of business stability than the national average, the first time that so many have been in this position for over two years.
On the downside, the High Street’s recent woes have impacted on North East retail businesses, which sit one from the bottom of their sectoral table at 37%, while the manufacturing (34% at elevated risk) and the professional services sectors (48%) are respectively ranked eighth and tenth.
R3’s insolvency risk tracker is compiled using Bureau van Dijk’s ‘Fame’ database and measures companies’ balances sheets, director track records and other information to work out their likelihood of survival over the next 12 months.
Andrew Haslam, chair of R3 in the North East and head of specialist business advisory firm FRP Advisory LLP’s Newcastle office, says: “The North East technology sector has become increasingly visible within the regional economy over recent years, and growing numbers of firms that are achieving national and international scale still have their roots here.
“Seeing consistent progress over a sustained period for technology and agriculture sector firms is very encouraging, and it would be great to see similar progress in other regional industries which are still battling very difficult economic conditions.
“The first quarter of the year is usually the quietest for the leisure sector, so seeing our hotels, pubs and restaurants maintaining their high positions in our business stability tables hopefully gives an indication of a good year to come, especially with the Great Exhibition Of The North and everything that will come with that just around the corner.
“It’s crucial for management teams in any industry to proactively address financial problems as soon as they become apparent, so that the widest possible range of options for addressing and resolving them remain readily available.”