More firms facing a struggle

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BUSINESSES in the North East are struggling more from the economic downturn than anywhere else in the UK, according to new research.

Insolvency trade body R3 said the region was among those with the smallest percentage of firms that had experienced a rise in turnover over the past three months.

Just a tenth of businesses saw turnover rise compared with a third in London.

Fewer than one in 14 saw an increase in their workforce in the last quarter, while the numbers seeing increased profits, 17 per cent, investing in new equipment, 21 per cent, or planning to enter new markets, 13 per cent, were below the national average.

Linda Farish, of the North East arm of insolvency trade body R3, said: “Businesses in our region are clearly not out of the woods yet, with signs of distress increasing compared with last quarter on most key indicators.

“While current stresses might not be enough to push businesses over the edge, prolonged periods of distress willtrigger an increase in formal insolvencies.

“As we can see from our research, more businesses are having to use their maximum overdraft.”