The North East’s technology sector has recorded a strong finish to 2016, according to the latest research by insolvency trade body R3.
After lying in ninth place out of 12 UK regions in October in terms of the proportion of firms with a heightened risk of entering insolvency in the next year, the regional tech sector’s position improved during November to leave it fifth in the rankings – and it has now moved up to fourth in December’s figures, just one percentage point behind the best performers in the country.
The region’s leisure industries are also maintaining their positive end to 2016, with the restaurant sector only ranked behind its peers in North West England around the UK, and the pub and hotel sectors positioned fourth and fifth in their respective lists.
Overall, regional businesses in six of the ten key industries that R3 monitors have been found to have a lower proportion of firms with a heightened risk of entering insolvency in the next year than the national average, with the North East’s retail and transport businesses both ranked in fifth place in their sector lists.
On the downside, the North East construction sector remains the least stable of any of the 12 regional peers across the UK, the region’s professional services and agriculture sectors are also performing less well than the national average, and despite moving one place up the comparative listings in the last month, the region’s manufacturing sector is still only ranked tenth out of 12.
Across all ten sectors, almost a quarter (24%) of all North East businesses have a heightened risk of entering insolvency in the next year, compared to an overall national average of 21%.
Neil Harrold, chair of R3 in the North East and a partner with Hay & Kilner Solicitors, says: “The technology sector has become increasingly important to the North East economy over recent years, and many growing businesses that have their roots here are now achieving success on a national and international scale.
“It’s encouraging to see improvements in business stability in a sector where progress can sometimes unavoidably be slow and investment requirements can often be high, and in a time of uncertainty where all good news stories are especially welcome, a continuation of this trend into the new year and beyond would be a real boost for the North East economy.
“The region’s leisure industries have maintained their respective positions in the national lists and we would hope to see further improvements in the next set of figures on the back of the always-busy Christmas party season.
“Commercial problems can strike any company in any sector at any time, and if issues become apparent, it’s vital that management teams proactively seek advice from a qualified source as soon as they can, so they have the best possible chance of steering their businesses towards calmer waters.”
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.