Manufacturing continues to be the West Midlands’ strongest industrial sector
West Midlands manufacturing businesses enjoyed a solid financial performance over the past month, in contrast with the tourism sector, which has continued to struggle.
The picture emerged in the latest sector tracking report from insolvency and restructuring body R3.
The statistics, compiled using Bureau Van Dijk’s Fame database, also reveal an uncertain outlook for the region’s transport and haulage operators.
The West Midlands manufacturing sector was among the UK’s top regional performers in April, with fewer than one-in-five (18.4%) businesses operating with an above average risk of insolvency. This percentage was surpassed only by Northern Ireland.
This is in line with the previous month (March), when the region’s manufacturing sector was among the top three most financially secure in the UK – outperformed only by Yorkshire and Northern Ireland – with 19.2% of businesses at higher than average risk of insolvency.
Conversely, the financial resilience of the West Midlands tourism sector is being tested as the R3 research reveals that almost one-in-three (30.1%) local operators have an above average risk of insolvency. This is the highest percentage of any region in the UK and is three points above the national average of 27%.
Transport and haulage operators in the region are also struggling, with over one-in-three (34.5%) at an elevated risk of insolvency. Only businesses in Yorkshire and East Midlands have a higher insolvency risk in this sector.
Commenting on the research, R3 Midlands chairman Chris Radford, a partner at the Birmingham office of law firm Gateley, said: “The West Midlands was once renowned as the ‘Workshop of the World’, and it is good to see our manufacturing sector stabilising once again and able to build on its international pedigree.
“The current economic climate is, however, providing significant challenges for other sectors in the region. The proportion of firms struggling financially in the tourism, transport and haulage sectors is clearly of concern.
“R3 advises that the monitoring of finances should remain a priority for all business owners as they seek to weather all eventualities. If cash flow becomes a major challenge, it is imperative to seek professional advice sooner rather than later.”