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Insolvency risk falls for region's businesses, says R3

Trade body says new research shows risk of insolvency is dropping among key sectors

Richard Philpott, a partner at KPMG in the region and Midlands chairman of the R3 insolvency trade body

The risk of redundancy among key business sectors in the West Midlands appears to have fallen, suggests new research.

Among the strongest performers in February and March were construction, banking and finance, and property, with the proportion of businesses at high risk of insolvency in each sector falling to 29 per cent, 26 per cent and 22 per cent respectively.

The research, by insolvency trade body R3, also suggests a strengthening of the professional services sector in the West Midlands.

It said the sector had experienced a two-month fall in businesses with a higher than normal risk of insolvency to 31 per cent while agriculture has dropped to a figure of 17 per cent.

R3 Midlands chairman Richard Philpott, a partner at professional services firm KPMG in the region, said: "Whilst a significant number of businesses continue to tread a fine line between insolvency and survival, these figures are certainly encouraging.

"I would expect them to improve over coming months as we see a rise in regional investment and a growth in national GDP."

R3 uses research compiled from Bureau Van Dijk's 'Fame' database of company information to track the number of businesses in key regional sectors which have a heightened risk of entering insolvency in the next year.

This positive economic picture for the region is echoed by R3's latest 'Business Distress Index', which charts company performance across the Midlands.

Published earlier this year, the research found the local economy was in increasingly robust shape with a record 73 per cent of Midlands businesses showing at least one key indicator of growth.

Half of those surveyed in the region had experienced a rise in sales volumes while a similar number (44 per cent) were showing increased profits.

Almost one in three (29 per cent) said their business was expanding and a third said they were growing their market share.

 

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