The number of active businesses across the North East rose by more than three per cent during 2019, according to new research by insolvency and restructuring trade body R3.
R3’s data shows a net increase of over 2,800 active firms based in the North East over the year just gone, with the number rising from nearly 82,800 at the start of January last year to over 85,600 12 months later.
The increase is slightly lower in terms of both percentage and actual numbers than the previous year, when there were just under 3,000 more active regional firms at the end of the year than there were at the start, a rise of around four per cent.
The North East pub and restaurant sector saw the biggest percentage increases in active businesses in 2019, with an increase of more than 12 percentage points in both.
The former saw a net year-on-year increase of nearly 150 active businesses, taking the number from just under 1,200 to over 1,300, while the latter went from under 3,200 to nearly 3,600, a rise of just over 400 firms.
Despite the High Street’s continuing challenges, the region saw a net increase of almost 400 retail businesses during 2019, with the figure rising from over 4,900 in January 2019 to over 5,300 in January 2020, while there was a net increase of more than 500 active firms operating in the regional construction sector, taking the current number of active construction companies in the North East to over 11,300.
The North East manufacturing sector had an almost identical number of active businesses in the Januarys of last and this year, while the technology/IT was the only one of the 11 sectors that R3 monitors to see a fall in numbers during that period, albeit of less than one per cent.
The figures are compiled by R3 using Bureau van Dijk’s ‘Fame’ database of UK companies.
Andrew Haslam, chair of R3 in the North East and head of specialist business advisory firm FRP’s Newcastle office, says: “2019 was a year of uncertainty on a wide range of fronts, but the North East continued to demonstrate its entrepreneurial spirit and its commitment to turning business ideas into commercial operations.
“Our leisure industries are continuing to lead the way, and the continuing investment in creating and upgrading hotels, bars and restaurants right across the region shows the optimism that leisure operators have about their future prospects.
“It’s also very encouraging that, despite the High Street’s widely-reported travails, there are still significant numbers of people who believe they can be successful in the retail sector in the North East, whether online or on the high street.
“The net increase in businesses inevitably hides the fact that a significant number of regional firms will have succumbed to financial difficulties last year, while many others will have struggled just to keep their heads above water and will still be in this position as 2020 gets underway.
“Much of the unseen work done by insolvency practitioners and restructuring experts helps troubled businesses find the best way forward, whether or not that means entering a formal insolvency process.
“Any business owner/managers who can see financial problems on the horizon should look for qualified advice on how they might be addressed as soon as they can.”