THE number of North East and Cumbria companies becoming insolvent rose in the final quarter of 2011, new research has revealed.

Analysis from financial services firm PwC shows that 143 companies in the region became insolvent in the period, up 2% on the previous quarter and 6% higher than a year earlier.

Nationally, the firm’s analysis revealed that the hospitality and leisure industry was worst affected, with a 30% rise in the number of corporate failures compared with 2010. The other sectors which have continued to struggle include construction, manufacturing and retail.

Sean Hamilton, PwC’s director of business recovery in the North East said: “Q4 would normally be seen as a good time for bars and restaurants because of the festive season so it is worrying that both these sectors saw a marked increase in insolvencies.

“We would normally expect to see more casualties in the post-Christmas period and we will have to wait to see whether this does occur or whether the early Christmas gloom resulted in some businesses failing earlier than would normally be the case.

“The post-Christmas blues are always a challenge for restaurants and bars, but some businesses are still performing well and these are often those that have focussed on ensuring they understand what their customers want and deliver without fail. Customers have a lot of choice and one bad experience in a bar or restaurant can lose that customer forever.”

“Those companies that react quickly and take action are those that typically have the greatest amount of options available to them and the most chance of resolving issues and seeing a positive solution.”