Businesses in the North East are continuing to benefit from the economic upturn, a survey has shown.
Latest figures for the second quarter of 2014 show a fall in instances of ‘critical’ financial distress of 8% year on year, close to the national drop of 9%, according to the Begbies Traynor Red Flag Alert research.
The report, which monitors the financial health of businesses in the UK, found critical distress in the region since the first quarter of 2014 showed slightly more improvement, with a 10% decrease. However, levels of ‘significant’ distress showed a more marked rise of 28% year on year, although this represented no increase compared to the first quarter.
Andy Haslam, partner of Begbies Traynor in the North East, said: “While the North East was one of the regions that experienced the most positive change in its fortunes during 2013, it is disappointing to see this recovery appearing to slow.
It is worrying to see that levels of significant distress, indicating the first signs of financial difficulty, have continued to increase at a high level year on year, leading us to believe that there may be more problems to come and the corporate picture for the region is not as rosy as we had hoped.”
“The recovery phase is a notoriously dangerous time for SMEs who have had their savings depleted during the recession and may be tempted to overtrade during the upturn, leading to cash flow problems.”