Companies across the region are expanding more quickly than the national average in terms of five key measures of business growth – and they are also experiencing fewer signs of commercial distress.
 
Those are the key findings of the latest edition of insolvency and restructuring trade body R3’s long-running Business Distress Index (BDI), which reports regularly on the levels of growth and distress of companies across the UK.*
 
More than two thirds (68%) of firms across the North East, Yorkshire and Humberside reported at least one sign of business growth according to the latest edition of the BDI, compared to the 64% average for the whole of the UK.
 
Of the individual indicators, the proportion of regional businesses expanding geographically or increasing staff numbers is more than half as much again as the national figure (42% vs 24%), while the proportions growing their market share, experiencing increased profits, investing in new equipment and seeing an increase in sales volume in the last nine months are all also ahead of their respective national averages.
 
In terms of indicators of distress across regional firms, only one in seven (14%) are reporting specific issues, compared to almost one third (31%) of business across the UK.
 
Nine per cent of regional firms said they were having issues with late payment of invoices, but this was only just over half of the national proportion (17%), 
 
Overall, more than half (55%) of the regional firms polled believe business activity will increase in the next year, with 40% expecting it to stay the same.

Across the UK as a whole, four per cent of those surveyed, which equates to around 79,000 businesses, say they would be unable to repay their debts if interest rates were to rise by a small amount – almost four times the 20,000 businesses in this situation in September last year – while 96,000 firms (five per cent) said they were just paying interest on their debts, rather than the debts themselves.

Neil Harrold, North East chair of insolvency and restructuring body R3 in the North East and a partner with Hay & Kilner Law Firm, says: “In any period of uncertainty such as that in which we currently find ourselves, business owners will generally just get their heads down and crack on, and our latest BDI suggests that regional firms are now experiencing the benefits of doing just that.

Any uncertainty over the consequences of Brexit hasn’t filtered through too much as yet, and it’s encouraging to see such overwhelming numbers of business owners feeling that they will be growing in the coming 12 months.
“While businesses experiencing individual signs of distress does not necessarily mean they’re in trouble, factors like falling sales or regularly going to the limit of your bank overdraft can’t be disregarded.

“Any management teams who think they foresee problems coming down the line should be proactively seeking qualified advice from a regulated source, so that have the best possible chance of finding and implementing the right corrective solution for their business.”
 
* Regional results are indicative due to small base number of respondents.