The latest research from insolvency trade body R3 has found that in September, the number of businesses in the Yorkshire region at a higher than normal risk of insolvency had risen significantly on the previous month.
In September, 23.1% of the 14,162 active manufacturing companies in the Yorkshire area are now at a higher than normal risk of failure; this is a 4.3% growth in the number of at-risk manufacturing businesses since August.
Despite this, the manufacturing sector in Yorkshire is still outperforming the UK average which stands at 23.7% of businesses facing insolvency. Yorkshire joined Northern Ireland, the North West and the West Midlands for areas where there was a below average percentage of businesses in the manufacturing sector facing insolvency.
The South East was the worst performing area with 25.6% of manufacturers in the area at a high risk. Meanwhile, construction businesses in Yorkshire have seen a 5% increase in the number at a higher risk of insolvency which takes the level in this area up to 29.3%, around 0.8% above the national average.
Chair of R3 in Yorkshire and restructuring partner at Deloitte, Adrian Berry, spoke about the latest findings to Insider Yorkshire; “With its textile and steel heritage, manufacturing has always been a key sector for Yorkshire and the region has succeeded in carving a niche in advanced manufacturing in recent years.
“While it is concerning to see a rising number of manufacturing businesses at higher than normal risk here and in other parts of the country, the PMI figures for August indicate that manufacturing is growing across the UK as a whole, despite the uncertainty around Brexit and the rising cost of imports.
“In the past, Yorkshire manufacturing businesses have proved resilient during tough times and while they are likely to face challenges in coming months, they are in a strong position to weather the storm.”
Although, the risk of insolvency has grown slightly for construction and manufacturing in Yorkshire over the course of September, businesses in this area of the country are still performing well and are showing resilience despite an uncertain economy. As we get towards the end of the year and leaving the EU gets closer, only time will tell how this will affect businesses from all sectors across the country.