Proportion of North East businesses at risk rises over year
The proportion of North East businesses with a raised risk of insolvency rose sharply over the last year, according to industry trade body R3.
The new R3 research found 35% of the nearly 80,000 active firms based in the North East have a higher than normal risk of entering insolvency within the next 12 months, compared to 25% in January 2017.
All of the 11 key regional industries that R3 monitors currently have higher proportions of firms within them at greater than usual risk of insolvency than at the start of last year, with four - retail, technology, manufacturing and professional services registering a year-on-year increase of nine percentage points.
The North East technology sector currently has the highest proportion of firms with a raised risk of insolvency, followed by professional services, construction and transport/haulage.
Overall, regional firms in six of the 11 key industries that R3 monitors currently have a worse rate of business stability than the national average.
Neil Harrold, chairman of R3 in the North East, said: “The Insolvency Service registered a 15% year-on-year rise in the number of corporate insolvencies across England and Wales last year, so these figures probably shouldn’t come as too much of a surprise.
“The North East was by no means alone in seeing such a significant rise in insolvency risk during 2017, and with much uncertainty still pervading the political and economic climates, we may see further increases as this year progresses.
“The positive end to the year that the regional hospitality industries clearly enjoyed provides some welcome encouragement, and suggests people still have the confidence required to be out spending their disposable income.
“Financial issues can arise for any business at any time, and it’s vital management are on top of cashflow, operations and management data.”