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Number of distressed businesses in North East rocket upwards

Numbers of distressed businesses in the North East rose by almost 20% over the last quarter, faster than anywhere else in the country.

Begbies Traynor, the business rescue and recovery specialist found that levels were considerably higher in the region that on a national level, which was registered at just 2%.

During the last quarter 101,341 UK businesses registered instances of ‘significant’ or ‘critical’ financial problems, of which 2,691 were in the region. This represents an annual increase of 22% in the North East.

Andy Haslam, partner at Begbies Traynor Newcastle believes the increase will further highlight the North-South divide, as the South East and London begin to show far greater economic resilience.

He commented: “With our heavy dependence on the public sector, it is not surprising that the region is witnessing financial distress at a far greater rate than anywhere else in the UK.”

Business to business support services were hardest hit, followed by the construction sector, who accounted for 21% and 15% of the total respectively.

Mr. Haslam added: “We are starting to see a knock-on effect on consumer spending with sectors such as hospitality and retail being hit by the reduction in discretionary spend.

“Unfortunately the loss of contracts and jobs resulting from the public sector spending cuts will be felt for some time to come.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .