Levels of distress amongst Northern businesses have fallen to below the national average, while an above average number are showing signs of growth, according to new research by insolvency trade body R3.
Its latest Business Distress Index indicates a clear resurgence in the Northern economy, with businesses in the region giving more positive responses to almost every question.
Only 19 per cent of Northern firms are now showing any of the key signs of business distress – significantly below the national average of 28 per cent and the lowest since the survey began in 2010. Just one per cent has had to make redundancies recently, compared to four per cent nationally.
Meanwhile 72 per cent of firms in the North are showing signs of growth, compared to 67 per cent nationally, and close to the record high of 77 per cent recorded in the region a year ago.
The survey also found that Northern businesses were also more positive about the economy, with 58 per cent saying they felt more optimistic than they were three months ago compared to 54 per cent nationally, and only 10 per cent less optimistic, compared to 20 per cent nationally.
Similarly 46 per cent of Northern firms expected business to increase in the coming year, in line with the national average, while only two per cent expected it to decrease, compared to six per cent nationally.
Northern companies even reported fewer problems with late payment, with just 13 per cent saying they had invoices 30 days or more overdue, compared to 21 per cent nationally.
Richard Wolff, North West chair of R3 and Head of Corporate Recovery and Insolvency at law firm JMW, said: “These findings indicate a new spirit of optimism in the North. While it could be that the region is benefiting from a belated recovery, the ongoing debate about the Northern Powerhouse seems to have captured the imagination of businesses, engendering a greater sense of ambition and confidence in the region’s potential.
“One slight note of caution is that while we have a higher than average number of businesses showing signs of growth, there are slightly fewer reporting increased sales and profits – so it is important to ensure that business expansion produces real benefits. However overall it is great to see Northern businesses looking ahead to a more prosperous future.”