Yorkshire construction sector builds on recovery

The construction sector in Yorkshire is on its way to making a significant recovery, according to research conducted by insolvency trade body R3.

The figures for October reveal that in Yorkshire the proportion of firms in the sector at higher than normal risk of insolvency fell by 1.4% month on month – the largest fall so far in 2015.

According to R3’s results, only 28.9%, or 5,301 of the 18,346 active construction firms in in the region, have a higher than normal risk of insolvency.

This is well below the national average in the sector of 29.9% and close to the level in the South West of 28.1% - the lowest across Great Britain and Northern Ireland.

Although there is improvement in the sector nationwide, a number of regions including the North East, the North West, Scotland and Northern Ireland saw the level at higher than normal risk remain above 30%.

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.

William Ballmann, chair of R3 in Yorkshire and partner at Gateley Plc, said: “While the fall in distress in the construction industry is not as dramatic as in some other sectors, it is of particular significance because of the knock on effect that improvement has on so many businesses. Despite recovery in the economy overall, the sector has continued to face challenges and it is only now that we are starting to see a real resurgence, buoyed by improving employment and stronger housebuilding.

“It is extremely encouraging that, at last, construction seems to be gaining momentum with increasing activity in both residential and commercial developments adding to a sense of optimism.”

Other sectors in Yorkshire which performed strongly this month include hotels which saw the overall negative band of businesses at higher than normal risk fall by 5.4%,, bringing it to just 19.3% of hotels in the region, the lowest level outside London.

Manufacturing in Yorkshire also continued to improve with the level of firms at risk decreasing by 1.4%, down to 19.9%, the smallest proportion of any of the 12 regions surveyed across England, Wales, Scotland and Northern Ireland.

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