Sharp rise in the number of NW firms at risk of going bust, new figures reveal
Figures from the restructuring and insolvency trade body R3 show the number of firms at risk of insolvency in the region has risen significantly over each of the past six months. Tony McDonough reports
More than 100,000 businesses across Merseyside and the North West are at risk going bust with tech firms most at risk, new data shows.
Figures from the restructuring and insolvency trade body R3 show the number of firms at risk of insolvency in the region has risen sharply over each of the past six months and is now 5 percentage points higher than it was in March
They show that 29.1% of businesses in the region are now considered above average risk of becoming insolvent within the next 12 months, compared to 24.2% in March.
In total, almost 105,000 North West firms now fall into the ‘at risk’ category.
Paul Barber, the North West chair of R3 and a partner at Begbies Traynor said the regional risk score is in line with the UK average of 29.8%.
“This is the sharpest and most sustained rise in business risk that we have seen for some time,” he explained.
“While the economy has held up well over the past year, these figures show that the strain on North West business is growing and if the pattern continues, then we can expect to see the fall-out in the coming months.”
Technology continues to be the highest risk sector of those monitored by R3, with 35.4% of North West tech firms considered at greater than normal risk of insolvency, followed by transport (34.2%) and professional services (33.9%).
Construction (28%), retail (25.8%) and manufacturing (23.7%) have seen smaller rises, as has the hospitality sector including restaurants (21.9%), pubs (22.1%), and hotels (20%).
Mr Barber added: “Some businesses may find the uncertainty around what the UK’s exit from the EU will look like means it is difficult to plan ahead and invest.
“At the same time they are having to cope with the rise in inflation, disruption from new technologies and other changes such as the cost of introducing the living wage and pension enrolments.”