Member Article

Over half of North East firms showing signs of growth, according to new research

According to the results of new research by insolvency trade body R3, more than half of the businesses across the North East are feeling direct benefits from the continuing economic recovery.

R3’s latest Business Distress Index (BDI) showed that 55% of firms in the North East, Yorkshire and Humberside are showing at least one of its five key indicators of growth.

The research also found that almost two thirds of businesses across the region (64%) are feeling more optimistic about their future prospects than they did three months ago.

However, the latest BDI also shows that signs of growth and distress are still inconsistent nationally, and while 73% of businesses in the South are reporting at least one sign of growth, this falls to 69% in the Midlands, and to 59% across an area including the North East, North West, Yorkshire and Humberside.

Correspondingly, while 34% of businesses in the South and 30% of businesses in the Midlands are reporting at least one sign of distress, this increases to 43% in the North.

R3 has tracked five key business indicators – investment in new equipment, increased sales volume, business expansion, increased profits, and growing market share - since March 2012, with each one measuring the share of regional businesses experiencing that particular sign of growth.

The North fares better than the UK as a whole on only one of these indicators, with 37% of companies experiencing increased profits, compared to a national figure of 33%.

Allan Kelly, North East chair of insolvency trade body R3 and a restructuring partner in Baker Tilly North East, says: “The Business Distress Index continues to reveal positive results for the North East, and it’s encouraging that business growth isn’t yet showing signs of decelerating whilst the pace of the recovery is being kept up.

“However, while it’s good to see growth continuing apace in all the UK’s regions, Westminster needs to bear in mind the fact that the South is pulling further and further away from the rest of the country in terms of economic performance, and the commercial and employment implications if this trend continues.

“Despite the generally good news in our latest BDI, North East businesses still need to be aware of the that they don’t over-stretch themselves. Controlling the growth opportunities they’re clearly looking to secure is always one of the key challenges facing management teams as economies come out of difficult periods.”

This was posted in Bdaily's Members' News section by Ellen Forster .