The increasingly strong positions enjoyed by several North East industries in relation to their peers across England and Wales have been revealed by new research from the regional arm of insolvency trade body R3.
R3’s latest analysis of the relative performance of 13 key industry sectors found that the North East’s transport & haulage and marine industries have the lowest proportion of companies with a higher than normal risk of insolvency of any British region.
The research also found that that region’s pub, restaurant and retail sectors had the second lowest proportion of firms in this position, while the North East manufacturing industry was only behind Yorkshire and the East Midlands in this respect.
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 on a monthly basis.
Its latest figures show that the region’s construction, property, hotel and agriculture sectors all also have a lower proportion of firms facing a higher than normal risk of insolvency than the average figure for England and Wales, with only three regional industries – technology, banking & finance and professional services – on the wrong side of their respective average rates.
R3’s positive findings follow on from the continuing regional confidence, increased profitability and expectation of growth reported in the North East Chamber of Commerce’s most recent Quarterly Economic Survey.
Allan Kelly, chair of R3 in the North East and a restructuring partner with Baker Tilly North East, says: “Seeing so many of our industries in such prominent positions adds further credibility to the positive regional data that’s come out in recent weeks, and while there are still challenges to address, the North East economy clearly has a great deal more momentum to take into a new year than it has had at any similar point since the recession began.
“Financial problems can of course strike any business at any point, regardless of the performance of the sector in which it operates, and managing the growth that comes with improving economic conditions can bring its own issues with the temptation to go after as much work as possible sometimes getting ahead of the operational and financial capacity that a business actually has to deliver it properly.
“The best way for all company owners and management teams to address any financial problems that arise is to get advice from a qualified source such as an R3 member as soon as issues become apparent, rather than just hoping that they’ll go away, and taking steps to solve the issues they’re facing as quickly as they can.”