PROFESSIONAL services firms in Yorkshire reported an improved performance in May and confidence in the region is higher than the rest of the country, according to insolvency trade body R3.
Its latest research shows that the proportion of companies at higher than normal risk of insolvency fell by two per cent in May.
Only 29 per cent of professional services firms in Yorkshire have a higher than normal risk of insolvency, compared with 31 per cent in the North West and 32 per cent across England, Wales, Scotland and Northern Ireland.
Of the 2,857 active professional services firms in Yorkshire, some 834 are now identified as being at higher than normal risk.
William Ballmann, chair of R3 in Yorkshire and partner at national law firm Gateley LLP, said: “After a turbulent few years in professional services, with the recession as well as legislative changes causing increased distress particularly in the legal sector, it is encouraging to see signs of an upturn.
“Traditionally, the Leeds City Region has been one of the leading centres for financial and business services in the North, generating billions of pounds every year and creating thousands of jobs, as well as providing the vital expert advice needed by other businesses in the region in order for them to flourish.“
He said that increased competition has seen the demise of a number of firms as well as a move towards consolidation in the sector.
“Those firms that have survived are emerging fitter and in a strong position to take advantage of the recovery,” he added.
“However, the environment in the legal and financial services sector remains challenging and any firms that are worried about their financial future should seek professional advice as early as possible.”
R3 uses research compiled from Bureau van Dijk’s “Fame“ database of company information to track the number of businesses in key regional sectors that have a heightened risk of entering insolvency in the next year.
Manufacturing was once again among the best performers, with the risk of insolvency falling by almost three per cent since April, giving Yorkshire the lowest level of manufacturing businesses at higher than normal risk across England, Wales, Scotland and Northern Ireland.
Of the 11,748 active manufacturing companies in Yorkshire, only 2,433 now have a higher than normal risk of insolvency.
This represents just 21 per cent of manufacturing firms in the region compared with a UK average of over 23 per cent.
Other sectors in the region that showed strong signs of recovery include transport and haulage, which built on its previous month’s resurgence with a further month on month fall of nine per cent.
In the hotel sector, businesses at higher than normal risk have fallen by four per cent since April.
Both the transport and haulage and the hotel sectors in Yorkshire had among the lowest levels of distress in the UK.
Mr Ballmann said: “Looking at the national picture, overall the region is performing strongly with manufacturing and transport in particular standing out. While some consumer facing sectors such as pubs and retail are continuing to have a tough time, distress is starting to fall and there are some positive signs that the worst may be over.
“With the General Election now firmly behind us, we are hopeful that businesses will have the confidence to plan for a more certain future and to build on the recovery which we began to see last year.
“Having fared better than many other parts of the country and with its strong industrial heritage, Yorkshire is well-placed to take advantage of these more optimistic economic conditions,” he added.