Manufacturing seen as driver of recovery
Manufacturing businesses showed the greatest resilience as the number of companies reporting financial strain fell year on year, according to Begbies Traynor, the insolvency specialist.
The traditional post-Christmas rise in financial distress resulted in 55 per cent more companies in distress in the first quarter of 2012 compared with the last quarter of 2011, Begbies reports in its Red Flag Alert on Friday. This was a 17 per cent fall from the same period last year.
The figures relate to those with “critical” problems, which face a winding up petition or county court judgments totalling £5,000, or “significant” problems, with a court action pending or out-of-date accounts.
Year on year, food and beverage producers’ distress fell by 37 per cent, print and packaging firms by 73 per cent and other manufacturing businesses by 49 per cent.
“Manufacturing is the star of the economy at present and the engine that could drive a recovery,” said Julie Palmer, partner at Begbies Traynor.
“Key manufacturing centres, including London, Manchester and Birmingham have seen falling critical distress over the past quarter when compared with the previous three months, and also compared to a year ago.”
The weak property market and low consumer spending has hit other sectors. Distress rose 113 per cent in the first quarter in property services and 94 per cent in construction though they fell 16 per cent and 13 per cent year on year.
A total of 154,370 companies were distressed, compared with 186,554 a year ago.
Mark Prisk, the enterprise minister, on Thursday said that it was vital to interest more young people in manufacturing jobs and pledged to use the Olympics to transform its image.
An exhibition at London’s Science Museum as part of the government’s “Make it in Great Britain” campaign will showcase the work of companies such as Mars, the confectioner, McLaren, the F1 carmaker, Airbus, the aircraft maker, and Sunseeker, the boatbuilder.
But Emma Bridgewater, founder of the Stoke-based ceramics company that bears her name, warned at a parliamentary event that manufacturing was struggling to attract young male recruits because they did not believe it was a job for life.