Member Article

North East restaurant and pub scene booming but instability surrounds construction sector

Now is the time to be part of the North East’s restaurant trade, according to the latest research by insolvency trade body R3, as the region tops new national business stability tables.

After looking into the proportion of firms with a heightened risk of entering insolvency in the next year, R3 found that the region’s restaurant industry is in the best shape of any of its peers across the UK.

Moreover, research shows that the North East’s pub industry is only behind Scotland and Northern ireland in stability following a fruitful Christmas period.

Neil Harrold, chair of R3 in the North East and a partner with Hay & Kilner Solicitors, says: “The region’s pub and restaurant industries both saw continuing improvements as the year drew to a close, and the festive celebrations have helped them to consolidate their gains.

“Already this year, we’ve seen a number of new investments and acquisitions announced for various premises around the region, and with development and refurbishment projects continuing apace in all the major conurbations around the North East, there’s still obviously a great deal of confidence in these industries’ future prospects.”

Construction instability

Overall, regional businesses in just four of the ten key industries that R3 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, with the North East’s technology and transport businesses both ranked in fifth place in their sector lists.

The North East construction sector remains the least stable of any of the 12 regional peers across the UK, while the professional services, retail, manufacturing, agriculture and hotel sectors are all faring worse than their respective national averages.

Across all ten sectors that R3 monitors, a quarter (25%) of all North East businesses have a heightened risk of entering insolvency in the next year, compared to an overall national average of 22%.

R3’s insolvency risk tracker is compiled using Bureau van Dijk’s ‘Fame’ database and measures companies’ balances sheets, director track records and other information to work out their likelihood of survival over the next 12 months.

Neil continued: “The end of the year brought a very mixed bag of results in different regional sectors, and the uncertainty that has been afflicting the wider economy is clearly taking its toll in the North East.

“Financial problems can hit any business in any sector at any time, and taking proactive action as early as possible is always the best way for management teams to give themselves the best possible chance of resolving them before they get out of control.”

Looking to promote your product/service to SME businesses in your region? Find out how Bdaily can help →