Latest figures for insolvencies in the North East show a big increase in the number of companies being affected, according to a leading trade body.
Analysis by insolvency and restructuring trade body R3 of new data provided by CreditSafe found 90 insolvency-related activities in the region in October compared to 71 in September.
The figure was also a 50% rise on the 60 incidents last October.
In better news, North East businesses had more than 140,000 overdue invoices on their books during October, but that was lower than the figure reported in September.
Business Live is reporting that the National statistics released at the end of October revealed the UK had seen highest quarterly insolvency numbers since 2009 and the highest numbers of creditors’ voluntary liquidations since records began in 1960.
Chris Ferguson, North East chair of R3, who is a director and head of recovery & insolvency at Gosforth-based RMT Accountants & Business Advisors, said: “The corporate insolvency figures for the third quarter of the year across England and Wales were the highest in more than two decades, and this is clearly being felt within the North East economy”.
“A combination of rising costs, increased creditor pressure and director fatigue mean more regional firms are turning to a insolvency processes to resolve their financial issues, and after years of battling through the pandemic, many directors appear to have had enough. Trading conditions are clearly tough right now, with consumers in particular being more cautious with their money, while costs are rising and the economy remains turbulent”.
“The Christmas period is a crucial time for many North East firms, especially those in retail and hospitality, and this year could be make or break for many. It remains to be seen whether this year’s Christmas trading period will be the shot in the arm or the final blow for those that are struggling, and we may sadly see a surge in insolvencies in the New Year if it’s the latter.”
Earlier this week, the NatWest North East PMI revealed that businesses in the region were cutting jobs as the region’s private sector economy suffered its fastest decline in more than a year during October.
This week will see the release of official Office for National Statistics data on unemployment and inflation, which will provide new insight into the health of the national and regional economies.