Member Article

Leisure leads the way for improved North East business stability

As business stability improves across the North East, the region’s leisue and hospitality industry is enjoying the highester resurgence.

Businesses in seven of the ten key industries that it monitors have been found to have a lower proportion of firms with a heightened risk of entering insolvency in the next year than the national average, according to the latest research by insolvency trade body R3.

The restaurant sector is the best performing category, with only its peers in Scotland being ranked ahead of it right around the UK, while the pub and restaurant sectors are ranked fourth and fifth in their respective lists.

The North East retail sector is continuing to slowly stabilise, and is now ranked fourth most stable out of its UK peers, while the technology, transport/haulage and professional services industries are all also outperforming the national average for their respective categories.

Elsewhere in the research, the North East construction sector remains the least stable of any of the 12 regional peers across the UK, with the proportion of companies with a heightened risk of insolvency being more than three percentage points higher than the national average.

Only London has a higher proportion of manufacturing businesses considered at high risk than the North East, while the region’s agriculture sector is also performing less well than the national average.

Across all ten sectors, almost a quarter (24%) of all North East businesses have a heightened risk of entering insolvency in the next year, compared to an overall national average of 21%.

Neil Harrold, chair of R3 in the North East and a partner with Hay & Kilner Solicitors, commented: “One of the most visible themes of 2016 has been the continuing investments being made by leisure operators in opening new venues and refurbishing existing ones, and the improvements that we’re seeing are what these operators would have been hoping for.

“With Christmas celebrations getting into full swing, the region’s hotels, bars and restaurants will be hoping to make as much hay as they can before the first quarter of next year, which is traditionally their most challenging period.

“If company management teams in any sector see problems on the horizon, it’s essential that they proactively seek advice from a qualified source as early as they can to give themselves the best chance of finding a positive way forward for all concerned.”

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