The gradual improvement in the North East economy has been supported by new research showing that the risk of regional businesses going into insolvency fell over the last year in six of ten key industry sectors, and held steady in three of the remaining four.
Insolvency trade body R3’s latest figures on the numbers of regional businesses with a heightened risk of entering insolvency in the next year found that the North East’s representatives ranked in the top four in six of the ten key sectors that it covers.
The North East transport/haulage sector, which has been the most stable of its peers across the UK for 11 consecutive months, recorded the biggest year-on-year fall in its insolvency risk, going from 24% in February last year to just 17% today.
The region’s professional services sector continued its improvement to record a five per cent drop (34% to 29%), while the retail, agriculture, pub and technology/IT sectors all registered year-on-year improvements of between two and three per cent.
The manufacturing, restaurant and construction sectors showed no change in their respective rates of insolvency risk over the 12-month period, while the hotel sector was the only one of the ten sectors measured by R3 to show a rise (19% to 22%), although it is still ranked the third most stable of its peers around the UK.
Every month, 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.
This month’s researched shows that the region’s restaurant sector is sitting on top of the list as the most stable of its UK peers for the third consecutive month, while the agriculture, retail and hotel and pub sectors are all in third place in their respective tables.
Neil Harrold, chair of R3 in the North East and a partner with Hay & Kilner Solicitors, says: “Despite some very obvious and difficult bumps in the road during 2015, the general story across the North East over the last 12 months has been one of quiet, steady progress, and it’s one that’s clearly reflected in the findings of our research.
“The transport and haulage sector has been leading the way in the UK for almost all that time, while the North East’s professional services firms have benefitted for a wider increase in business confidence and a greater willingness from many businesses to explore new opportunities.
“Stability in regionally-important sectors like manufacturing and construction is something that companies in these industries would have grabbed with both hands at any point over the last few years, and it’s to be hoped that further progress can be built on what’s been achieved across the region over the last year.
“The prospects for the coming year are rather unclear, with regional optimism being balanced out by national and international indicators which seem to suggest possible problems ahead. North East business owners and managers need to be keeping a careful watch on their businesses’ order books and cashflow, so that they can identify and address any potential problems arising at the earliest possible point.”