THE number of companies falling into administration in the North East has increased by 26.7% in the third quarter.

But, while the percentage rise in administration appointments noted by the London Gazette was the highest in the country, the number was by far the smallest.

The region saw 19 appointments between July and September, compared with 16 in the second quarter, but this compared with 20 to 22 in East Anglia, the next biggest number, and 165 rising to 198 in London, which was the biggest overall.

Nationwide, there was a 7.8% rise from 553 to 596 and only two regions – the South West and North West – saw a fall in the number of administrations.

But the figure was the same as a year ago, which highlighted the continuing stagnation in England’s overall economy and the continuing trend for businesses to merely survive assisted by the low costs of borrowing.

The worst-hit sector was construction, which saw 122 companies collapse nationwide, followed by retail and wholesale with 89, and services with 86.

Overall, 29% of national administrations were in construction and property which, unsurprisingly, showed the continued poor state of the property market and the lack of spending on new developments.

The most recent rent quarter day did not bring about the high-profile failures that some were expecting. However, with the high street now heading for the all-important Christmas period, retailers will be hoping for, and reliant on, a surge of consumer spending that the festive season usually brings.

Mark Ranson, partner at Baker Tilly Restructuring and Recovery LLP, said: “The insolvency figures demonstrate that businesses continue to have little room for manoeuvre, either with growth or profit. Therefore, for companies already struggling with cash issues, it is even more vital to tackle any potential issues in advance. Traditional credit lending continues to be less available, and HMRC is demonstrating signs of being more aggressive in its actions with defaulting creditors.

“For most businesses, flexibility in their financial planning will be essential to their survival. Looking at alternatives to traditional bank lending such as asset-based lenders and private equity can offer new opportunities and, for the right businesses, additional working capital should allow them to manoeuvre through this stagnant economic phase.”