NEW research supports recent signs of business growth across the region.
According to insolvency body R3’s latest Business Distress Index (BDI) a record 63 per cent of firms in the North-East, Yorkshire and Humberside are showing at least one of five key indicators of growth.
R3 has tracked these five key indicators – investment in equipment, increased sales volume, business expansion, increased profits, and growing market share - since March 2012, with each indicator measuring the share of regional businesses experiencing that particular sign of growth.
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It comes a week after the North East Chamber of Commerce's (NECC) Quarterly Economic Survey (QES) reported that business confidence among respondents was at a 10-year high.
Steve Ross, who is chair of insolvency trade body R3 in the North-East and a partner in the restructuring team at the Sunderland office of Baker Tilly Business Services Limited, said:
"The latest results are a welcome sign that the recovery is bedding in and gaining ground, and after such a prolonged period of stuttering growth - if any at all - it’s very nice to be able to talk about good news for a change.
"The willingness of businesses to begin investing in their long-term future again suggests a level of business confidence that has previously been missing. If this change in attitude can unlock business investment, then that bodes well for the future.
"A common complaint since the recession has been that businesses lack the confidence – whether in bank lending, government policy, or economic performance – to make long-term investment decisions; this lack of investment has itself helped hold back economic recovery."
He continued: "Although over a third of businesses are showing signs of distress, there is no major reason for concern. As long as business distress is carefully and proactively managed, business and economic growth should not be undermined, and in fact, rising levels of distress would not be unexpected either.
"In the early stages of a sustained recovery, businesses will often begin to find things becoming tougher rather than easier - creditors become more confident in pursuing debts; the results of under-investment during a recession are exposed and increased demand can put pressure on cash flow, supply chains, or business models."