The traditional powerhouse of the North East economy is recovering from the ravages of the economic downturn more strongly than its rivals across the country.
New research by insolvency trade body R3 has revealed the region’s manufacturing industry is outperforming its counterparts in every other area of the country.
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.
The survey found that just over 20% of the manufacturing businesses in the North East and Yorkshire have a higher than normal risk of insolvency, the smallest proportion in any region in England and Wales, and a figure that has held relatively steady since Autumn last year.
The figure compares favourably to the national average of just over 23%, with the manufacturing sectors in London (30%) and the South East (24%) having the greatest proportion of manufacturing firms with a higher than normal risk of becoming insolvent.
Allan Kelly, who is chair of R3 in the North East and head of the turnaround and insolvency team with regional accountancy firm Tait Walker, said: “Even in the teeth of the recession, the North East remained home to hundreds of manufacturers that were trading well, winning new contracts, and sustaining and creating employment, and it’s pleasing to see this traditionally strong sector now leading the way towards sustained recovery.”
The region’s transport and haulage sector is also faring better than most of its rivals around the UK according to R3’s research, with just 23% of firms potentially facing a raised risk of insolvency, compared to a national average of 31% and figures as high as 37% (London and the South East) and 33% (West Midlands) elsewhere.
The North East’s technology and IT sector has the highest proportion (39%) of businesses with a greater than normal risk of becoming insolvent of any regional market sector, although this is only just ahead of the national figure (37%), with restaurant (38%) and pub (36%) businesses next on the list.