Number of struggling Midlands companies falls to record low – R3

THE number of Midlands companies struggling for survival has fallen to a record low, with 66% of firms in the region reporting none of the key signs of business distress.

New research from R3, the insolvency body, claimed the statistic was almost triple the 23% recorded in March 2012 when R3 launched its Business Distress Index to monitor regional fluctuations in sales, profit and market share as well as maximum bank overdraft use and redundancy levels.

The index also reveals that Midlands business growth remains relatively close to the high hit last autumn, with 67% of the region’s companies now showing at least one key sign of growth, which is six points down from the record 73% last October but 25 points up from 42% in March 2012.

R3 Midlands chairman Richard Philpott, a partner at KPMG in the region, said: “The fall in regional distress levels is very encouraging, particularly when married with evidence of business growth.   However, the path to full recovery continues to be littered with obstacles, not least a possible personal debt ‘bubble’ and a potential rise in interest rates.

“While it remains significant that a third of all businesses in the region are still showing signs of distress, the good news is that this latest R3 research adds weight to the idea that our local marketplace is becoming healthier and increasingly confident about its prospects.”