Business distress levels in the East now the lowest in the UK, R3 survey reveals

Frank Brumby, eastern region chairman of R3.

Frank Brumby, eastern region chairman of R3. - Credit: Archant

Distress levels among firms in the East of England are now the lowest in the country, according to research by insolvency trade body R3.

Only 7% of businesses in the region are reporting any of the key indicators of distress, such as a reduction in profit, sales volume or market share, according to R3’s latest Business Distresss Index (BDI).

This is 17 points below the national average of 24% and 40 points below the South East, the region with the largest number of struggling businesses.

The R3 research reveals that only 4% of East of England businesses are reporting a reduction in sales, compared to 13% in the North of the UK and 15% in the South. Only 4% of the region’s firms say they are experiencing a decrease in profits, considerably lower than the 12% figure for the North and 14% for the South.

R3 eastern region chairman Frank Brumby, a director at Isadore Goldman in Norwich, said: “This is very positive news for local businesses, with every indicator of distress tracked by R3 nationally at its lowest level since our research began in 2012.

“Many local companies will now feel they have successfully negotiated the trickier parts of the rapid economic growth we saw last year.

“Looking ahead, East Anglia’s businesses are going to face a mixed economic picture. Although the likely date of an interest rate rise continues to be moved further into the future, an increase is inevitable. The Bank of England’s growth outlook remains solid but has been downgraded. It remains to be seen how far the imminent EU referendum will affect businesses’ thinking.

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“R3’s advice is that businesses should remain cautious over the coming months and not overstretch themselves financially in such an unpredictable economic environment.”