More signs have emerged of continuing business growth in the North-east, reinforcing predictions 2014 would see an upsurge in the region’s economy.
Insolvency trade body R3 suggests a record 63% of firms in the North-east, Yorkshire and Humberside are showing at least one of five key indicators of growth.
R3 has tracked five key indicators – investment in equipment, increased sales volume, business expansion, increased profits, and growing market share – since March 2012, with each indicator measuring the share of regional businesses experiencing that particular sign of growth.
The news comes just days after the North East Chamber of Commerce’s Quarterly Economic Survey returned the most positive set of results in more than a decade and Lloyds Bank Commercial Banking’s Business in Britain report showed confidence in the North had grown, with rising expectations for orders, sales and profits in the next six months.
Steve Ross, who is chair of insolvency trade body R3 in the North-east and a partner in the restructuring team at the Sunderland office of Baker Tilly Business Services, said: “The latest results are a welcome sign that the recovery is bedding in and gaining ground, and after such a prolonged period of stuttering growth – if any at all – it’s very nice to be able to talk about good news for a change.
“The willingness of businesses to begin investing in their long-term future again suggests a level of business confidence that has previously been missing. If this change in attitude can unlock business investment, then that bodes well for the future.
“A common complaint since the recession has been that businesses lack the confidence – whether in bank lending, government policy, or economic performance – to make long-term investment decisions; this lack of investment has itself helped hold back economic recovery.”
The results of the latest Business Distress Index show the number of firms reporting growth in their market share in the last four months has jumped from 21% to 33%, and that the proportion experiencing expanding sales volumes over the same period is ahead of the national average (44% versus 42%).
More than two in five firms (41%) said they were looking to invest in new equipment, while 29% had experienced increased profits over the last four months.
The number of firms in the North that are exhibiting any of the five key symptoms of business distress that the BDI also investigates is slightly higher than the national average (43% versus 37%), with three in ten firms saying they saw profits fall over the period in question.
However, only 3% say they’re currently regularly maxing out their overdraft facility, compared to a national figure of 10%. Plus the proportion (9%) saying they’ve had to make redundancies is the same as the UK-wide equivalent.
Source: Gazette Live