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Jamie Hardesty

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Companies in North East industry sectors continuing to outperform rival regions

Companies operating in several North East industry sectors are continuing to outperform their peers from rival regions across the UK.

The latest analysis by insolvency trade body R3 of the relative performance of 12 key industry sectors found that the North East’s restaurant sector has the lowest proportion of companies with a higher than normal risk of insolvency of any UK region, while our transport and retail sectors were in the best position of any of their peers in the English regions.

The research also found that the North East’s traditionally-strong manufacturing sector has the second lowest proportion of firms in this position, behind only its peers in Yorkshire, while the North East agricultural industry is only behind the East Midlands in this respect.

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 on a monthly basis.

Consolidated figures for the second half of 2014 show that the North East’s restaurant, technology, construction and agriculture sectors have all seen the proportion of firms therein facing a higher than normal risk of insolvency fall over that period, with only marginal rises of less than one per cent hitting the manufacturing, technology, retail, construction and transport sectors.

Only the region’s hotel and pub sectors saw a rise of two per cent or more over the second half of 2014.

Chair of R3 in the North East and a restructuring partner with Baker Tilly North East, Allan Kelly, said: “Reviewing how things stand at the start of 2015 shows a region that has become more resilient during 2014, and that there is an opportunity to achieve even greater stability and success throughout the coming year.

“With their traditionally important positions within the North East economy, it’s particularly encouraging to see both our manufacturing businesses doing so well in comparison to their peers across the nation, and the insolvency risks facing the construction sector lessening over the second half of 2014.

“The coming 12 months will no doubt encompass their own challenges, chief amongst which could be properly managing the growth that comes with the improved economic conditions that are forecast.

“The temptation to go after as much work as possible can sometimes override the operational and financial capacity that a business actually has to deliver on its promises, leading to overtrading and insolvency dangers that can be as great as those caused by not having enough sufficient sales.

“The best way for company owners and management teams to address their financial problems is to proactively seek advice from a qualified source such as an R3 member as soon as issues become apparent, rather than just hoping that they’ll go away.”

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