Insolvency risk falls for industries in the North East

The risk of businesses facing insolvency has fallen in six of ten key industries in the North East over the past year and three of the other four have remained steady. Research from R3, the industry body for business recovery professionals, supported the view that the economy in the region was gradually recovering.

The transport and haulage sector, which has been the more stable in the North East than anywhere else in the UK for 11 consecutive months, recorded the biggest year-on-year fall in its insolvency risk levels, falling from 24% in February last year to just 17% today. 

7% represents a great improvement for regional businesses in that sector but there’s no room for complacency. The 17% level still means that almost one in five North East businesses in the transport and haulage sector are at a heightened risk of entering insolvency over the next 12 months. Businesses facing serious problems should enlist the assistance of an insolvency practitioner in London, Newcastle or wherever else they might be based in the UK, for guidance and advice. 

The North East’s professional services sector also continued to show marked improvement, recording a 5% fall from 34% to 29%.

The retail, agriculture, pub and technology/IT sectors all showed smaller year-on-year improvements, with levels of insolvency risk falling between 2% and 3% in each case. The region’s traditionally strong manufacturing sector showed no change, but the North East had the second lowest proportion of firms facing higher levels of insolvency in this sector, behind Yorkshire.

The restaurant and construction sectors also showed no change in their respective rates of insolvency risk over the year. The only sector to have increased its proportion of businesses at a heightened risk was the hotel sector. The figure rose from 19% to 22%, but it was still one of the most stable regions for that sector in the UK.

By Phil Smith

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