Trade body R3: 'North East construction sector is only crawling back to the top'
The region’s construction sector is continuing to make ‘slow but steady’ progress against its peers across the UK.
This is according to the latest research from insolvency and restructuring trade body R3.
The proportion of regional businesses in the construction sector with a higher than normal risk of entering insolvency in the next 12 months rose from 29.2 per cent in August 2017, to 43.2 per cent a year later.
But over the last eight months, that proportion has held relatively steady, and now stands at 43.9 per cent.
Andrew Haslam, chair of R3 in the North East and head of specialist business advisory firm FRP Advisory LLP’s Newcastle office, commented: “For a long time, until mid-2017, the North East construction sector faced the highest insolvency risk of any of its UK peers…
“But while progress has been painfully slow at times, the regional situation does seem to have steadied. The surge in the construction of new student accommodation shows no signs of stopping, while the government’s drive to build more houses across the region is resulting in a constant stream of planning applications coming forward.
“Add in the continuing flow of investment in leisure industry venues that rarely seems to slow in the North East and there are reasons to feel at least a little optimistic about the construction industry’s prospects for the rest of the year and beyond.”
Andy continued, addressing the idea that businesses “need to keep a close watch for problems that could be coming their way, as they can for any business in any sector at any time.
“They need to be prepared to take proactive steps to address their problems before small problems turn into significant ones.”
This research is also said to show that North East businesses in six of the 11 sectors it monitors are performing better than the national averages across respective industries.
The North East’s pub and restaurant sectors continue to have the lowest proportion of companies at higher than normal insolvency risk of any region in the UK.
The overall proportion of all North East companies with an elevated insolvency risk (41.7 per cent) remains lower than the 42.7 per cent figure for the UK as a whole.
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