The North East manufacturing industry has made a sluggish start to 2016, but there’s better news elsewhere in the regional economy according to new research by insolvency trade body R3.
The proportion of regional manufacturing firms at higher risk of going into insolvency in the next year has risen by more than five per cent since the start of the year, and now stands level with the 23% national average for the sector, with only its peers in Wales, the South East and London of the 12 UK regions now lagging behind.
However, a number of other industries, including retail, transport/haulage, agriculture, hotels and professional services have all shown improvements in the first quarter of 2016, while the construction and technology/IT sectors have remained stable.
Every month, R3 uses research compiled from Bureau van Dijk’s ‘Fame’ database of company information to track the number of businesses in ten key regional sectors that have a heightened risk of entering insolvency in the next year.
The North East transport/haulage sector has been the most stable of its peers across the UK for a whole year, while the region’s restaurant sector is at the top of its national rankings for a fourth consecutive month.
The regional agriculture, retail and hotel sectors are all in the top four place in their respective tables, while only the North East construction industry is the only sector of the ten measured by R3 that sits outside the top half of its table.
Neil Harrold, chair of R3 in the North East and a partner with Hay & Kilner Solicitors, says: “While the regional manufacturing sector has undoubtedly declined in size and importance over the last two decades, the fact that there are still over 4,000 businesses across the region that fall into this category shows that it continues to hold a significant place in the wider North East economy.
“With many thousands of regional jobs depending on the health of our manufacturing sector, and on the markets that take the many and varied items that it produces, it is to be hoped that the nervousness that has been apparent both at home and abroad this year dissipates as quickly as possible.
“The better news across many other regional sectors is very welcome, and is perhaps more representative of the generally steady progress that the North East has made since emerging from the economic downturn.
“Despite this, financial problems can arise for any companies in any sector at any point, and proactively seeking advice on how to address any predicted or actual business issues is the most likely way of finding a way to get past and beyond them.”