Friday, August 14, 2020

Improved financial performance for most sectors in Yorkshire

Between June and July, there was a marginal fall in the proportion of Yorkshire businesses are higher than usual risk of insolvency, R3 data shows.

In Yorkshire, all 11 of the sectors monitored by the insolvency and restructuring trade body saw their levels of businesses at higher than normal risk of insolvency either remain flat or decrease between June and July.

The construction sector, often considered to be a bellwether of economic fortunes, was stable, with a marginal 0.3% fall in the number of Yorkshire firms at elevated risk.

Of the nearly 27,000 active construction companies in the region, 46% or around 12,400 were deemed to be in the higher risk band. The level of construction companies in the region at increased risk is close to the UK-wide figure of 45%.

The sector which saw the greatest month-on-month decrease in Yorkshire was hotels, with a 1.8% fall in levels of businesses at higher than normal risk of insolvency in the next 12 months.

Looking across the UK and across the sectors, Yorkshire performed relatively well with 44% of businesses at elevated risk, only slightly higher than the national average of 42%.

“With the UK’s latest economic figures indicating that we may be on the cusp of the first quarterly fall in GDP since 2012, there are very real fears that Brexit uncertainty, together with the global trade downturn, are having an increasing and negative impact on businesses,” said Eleanor Temple, chair of R3 in Yorkshire and barrister at Kings Chambers in Leeds.

“While we are seeing relatively high levels of businesses at higher than normal risk of insolvency across many sectors and regions, it is reassuring that Yorkshire appears to be holding its own.

“The region has seen elevated risk levels remain flat or fall in nearly all sectors monitored by R3 this month, including construction, which has such a crucial knock-on effect on many other businesses.

“As many businesses brace for a possible no-deal departure and the disruption to supply chains this will cause, it is more important than ever that directors keep a close eye on cash flow and profit margins, and seek professional advice at early signs of financial trouble when the most options are available.”

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