The North East technology sector is continuing to see a slow but steady reduction in its risk profile, according to insolvency and restructuring trade body R3’s latest research.
The proportion of North East tech firms with a higher than normal risk of entering insolvency in the next 12 months (47%) has fallen for the fifth consecutive month and has now dropped below the national average (48%) for the first time since last May.
The latest data shows that North East businesses in eight of the 11 sectors monitored by R3 are performing better than the national averages for their respective industries, with only the manufacturing, retail and professional services sectors being on the wrong side of their UK-wide industry averages.
The North East pub and restaurant sectors continue to have the lowest proportion of companies at higher than normal insolvency risk of any region in the UK, while the agriculture and hotel sectors are in second and third place in their respective lists.
The overall proportion of all North East companies with an elevated insolvency risk (42%) remains just lower than the 43% figure for the UK as a whole.
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.
Andrew Haslam, chair of R3 in the North East and head of specialist business advisory firm FRP Advisory LLP’s Newcastle office, says: “The North East tech sector is getting an increasing amount of national recognition for its industry-leading capabilities and achievements, and its importance to the regional economy is growing concurrently.
“The reductions in elevated insolvency risk levels over recent months have been incremental, but in the present economic climate, the fact that the IT sector has consistently improved by small margins over an extended period is a very welcome development.
“Our hospitality sectors are continuing to hold their own at the top end of R3’s business stability rankings, while the North East construction sector, which was the worst-performing of its peers anywhere in the UK not so long ago, has now climbed up to fifth place and is doing better than the national industry average.
“Despite this positive news, financial problems can hit any business in any sector at any time, and if business owners start to see trouble on the horizon, it’s crucial that they give themselves the best chance of reducing or avoiding it altogether by seeking qualified advice as quickly as they can.”