RESEARCH suggests the climate for North-East businesses is improving, and reports a drop in insolvencies.

PricewaterhouseCoopers’ (PWC) latest analysis into corporate insolvency shows that 103 companies became insolvent in the third quarter of this year in the North-East and Cumbria.

It represents an 24 per cent fall on the previous quarter and a 30 per cent decrease in comparison with the same quarter of last year.

On a rolling 12-month basis, the numbers show a 17 per cent decrease in insolvencies.

Sean Hamilton, director in the business recovery services practice at PwC in Newcastle, said: “The reduction in insolvencies reflects the expectation and hope that more favourable conditions will return and a viewpoint that alternative options to insolvency are being considered.

“North-East and Cumbria businesses are certainly not out of the woods yet as we expect looming public sector cuts will hit the bottom line of many public sector suppliers.

“Companies within the construction and service industries could potentially be among the worst hit.

“A modest increase in interest rates would also make a material difference to many struggling companies.”

Nationally, a total of 3,313 companies became insolvent in the third quarter of this year, an 18 per cent fall on the previous quarter.