Firms at higher risk of going into insolvency
The proportion of North East businesses with a raised risk of insolvency has risen sharply since the beginning of 2017, say industry officials.
Research by industry trade body R3 has found 35 per cent 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 per cent in January 2017.
All of the 11 key regional industries that R3 monitors currently have higher proportions of firms at greater than usual risk of insolvency than at the start of last year.
The North East technology sector has the highest proportion of firms with a raised risk of insolvency (42 per cent), followed by professional services (41 per cent), construction (36 per cent) and transport/haulage (35 per cent).
Neil Harrold, chairman of R3 in the North East and a partner with Hay & Kilner Law Firm, said: “The Insolvency Service registered a 15 per cent 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.
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“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 enjoyed provides welcome encouragement, and suggests people still have the confidence required to be out spending their disposable income.
“Financial issues can arise for any business in any sector at any time, and it’s vital that management teams are on top of their companies’ cashflow so they can act quickly.”