Slump slowing, reports say

Oct 22 2009 by Jaz Davison, Evening Gazette

THE train of recession could be running out of steam in the North East, three new surveys have indicated.

Quarter-on-quarter business failures in the North-east dropped by more than 25% to 204 in the three months to September - almost double the national average fall of 13.5%, according to information provider Equifax.

The research also showed that every business sector had seen a fall in the number of firms going bust in quarter three, with the wholesale sector seeing the steepest decline at 19.4%.

Meanwhile, Begbies Traynor’s quarterly Red Flag Alert statistics revealed a 33% fall in the number of North-east firms suffering critical problems (those with CCJs totalling £5,000 or more and/or winding-up petition-related actions).

The data comes hot on the heels of research which showed the number of insolvencies in the North-east had fallen 26% from September 2008 to 46 last month - the biggest decrease in the country.

But some of the region’s firms are still facing problems, with Tyneside housebuilder David Barlow Homes - behind the Waterside development in Stockton - falling into administration earlier this month.

Mark Blayney, a Darlington-based business turnaround specialist, said the results were still being skewed by Government policy, which was giving businesses more time to pay their tax bills.

Mr Blayney said: “I’d love to be proved wrong but I’m still concerned that there’s going to be a catching up process.”

He said financial services firms appeared to be recovering from recession quicker than manufacturers, which have been hit hard by falling output and demand.

But a new survey by the CBI said that manufacturers were “turning the corner”, with rising output expected over the next three months.

The business group said a 4% balance of firms expected higher volumes in the coming quarter - the first positive result since June last year and the best since March 2008.