New research shows that the number of ‘severely distressed’ SMEs in the North West decreased in Q4 2021 despite increasing in the UK as a whole, partly due to growth prospects in manufacturing.
Research from business advisory firm Quantuma found that there was a significant spike in the number of financially distressed companies in the UK in December 2021, but no such pattern emerged in the North West region.
However, despite performing against the UK trend overall, the North West performed below average in terms of growth and financial strength in the financial services, administration, transport, hospitality and entertainment sectors.
In contrast, much of the improved economic activity in the region was driven by the manufacturing sector, which performed better in the North West than all other UK regions except for the Midlands, according to Quantuma.
Using a predictive model designed to provide insight into the health of UK SMEs, Quantuma estimates that growth prospects in North West manufacturing are 3 per cent higher than the rest of the UK.
Frank Ofonagoro, Managing Director and Head of Quantuma’s Financial Advisory team in the North West, said:
“Like many other parts of the UK, the North of England has experienced unprecedented levels of distress in the last two years and whilst it is encouraging to see some of the positive insight from [our predictive model] on SME growth there are more challenges ahead for the North West business community.
“For those businesses that are facing increased pressure on cash flow and their balance sheet, the earlier they review and diagnose the reasons for underperformance, the more time they will have to identify and implement relevant recovery options.”
SME manufacturers in Greater Manchester can access specialist advice on financial planning and improving productivity via our expert Manufacturing Service. You can also learn more about understanding your cashflow on our manufacturing blog.