Northern Ireland’s manufacturing sector has the lowest rate of firms at a higher than normal risk of insolvency of anywhere in the UK, according to the latest research by insolvency and restructuring trade body R3.
In August, under one in five (19%) of Northern Ireland’s manufacturing businesses were considered at higher than normal risk of becoming insolvent in the next year, lower than the UK average of 22.9%.
The transport and haulage, retail, and construction industries also saw the lowest rate of risk of insolvency across all UK regions, at 16.5%, 20.5%, and 23.9% respectively.
Taking all business sectors into account, local businesses had the second lowest overall risk profile, with 24.4% of all companies deemed at higher than normal risk, compared to 28.2% in the UK as a whole.
However, the report does indicate that the figure is 2.7% higher than it was in January, and reflects a general trend towards a higher rate of insolvency risk across all parts of the UK since the start of the year.
“Despite continuing political uncertainty in Northern Ireland, the latest figures are an encouraging sign that the economy has remained resilient, with manufacturing risk levels only slightly higher than earlier this year,” said Stephen Cave, chair of R3 in Northern Ireland and a director of business advisors at PwC.
“Manufacturing exports, at approximately £6 billion per year, make up almost two-thirds of all of Northern Ireland’s export sales, underlining the sector’s importance to the economy.
“The increase in the proportion of Northern Irish companies at higher than average risk of insolvency since the start of the year does however act as a reminder that no businesses can afford to be complacent.
“Whatever challenges do arise, as long as businesses remain confident, and ensure they seek the appropriate professional advice, whether this be at the first signs of financial uncertainty, or importantly to assist them in formulating and implementing plans to drive their business forward and deal with challenges, the region should continue to see low levels of insolvency risk across many sectors.”