Businesses under pressure in south east, finds survey

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Businesses in the south east of England are under increasing pressure with the region suffering from an acceleration of administrations over the past year, according to accountant and insolvency specialist Baker Tilly.

The south east (excluding London) and East Anglia have seen an increase in administrations of 32% and 41% respectively, year-on-year (Q1 2010 to Q1 2011), it reports.

The service and construction sectors have been particularly hard hit with administrations up 30% and 22% respectively.

According to Baker Tilly, the last year has seen a specific squeeze on these sectors as contracts decline or cease altogether and more services are taken in house.

Coupled with harsh winter weather conditions in Q4 2010 and a tightening of consumer spend post-Christmas it has been a tough market to operate in, the company adds.

Overall, administrations fell 8.2% across England in Q1 2011 compared to the same period in 2010, the figures reveal. However, despite the fall individual regions’ relative performance has been varied.

For example, north east and Yorkshire and Humberside and the Midlands have seen a decrease of 31%, 20% and 10% respectively.

Matt Haw, partner at Baker Tilly Restructuring and Recovery LLP, said: “These figures show a reversal in fortunes when comparing the north and south in previous quarters. However, it may be too soon to say whether this is an emerging trend. Traditionally the south east is the first to recover alongside London as the services sector is strongly predominant in the region.

“Q1 is typically a challenging time of the year for many businesses. Combined with other challenges, the 0.4% decline in GDP indicates further unforeseen pressure on the economy.”