The percentage of firms in Wales at heightened risk of insolvency is currently lower than the UK average, according to the latest research by insolvency and restructuring trade body R3.
With 38% of firms at increased risk, the region sits just over 1 percentage point lower than the UK average of 39.1%.
This places Wales with the fourth lowest level of risk out of all 12 regions monitored by R3, beaten only by Scotland (32.5%), Northern Ireland (35.3%) and London (36.8%).
This is the second month in a row for Wales in the fourth spot, and is a noticeable improvement from earlier on in the year, with Wales ranking fifth of twelve in February, and eighth in January.
Wales has also seen the lowest increase in risk of all twelve regions across the UK from March till April (1.4%), less than the average rate of change across the UK (2%).
Commenting on the research, Louise Durkan, Chair of R3 in Wales and a director at Deloitte, said:
“It is fantastic to see the Welsh economy consistently performing better than the UK as a whole. Given a number of recent challenges for businesses in the first quarter of the year, such as the Beast from the East and its impact on consumer spending, tourism, and ordinary business activity, this will be seen as an encouraging sign.
“A lot of the region’s success can be placed on the strong performance of the construction, and transport and haulage sectors, both of which are seeing a significantly lower level of firms at heightened risk of insolvency than the UK average. Continuing investment within the region, particularly towards construction in Cardiff, is helping to steer the economy in the right direction.”
Nearly four in ten (37.9%) of Welsh construction firms are at heightened risk of insolvency in April, markedly lower than the sector’s UK average of 40.6%. Similarly, at 37.5%, the transport and haulage sector sits almost 5 percentage points lower than the UK average of 42.2%.
However, not all sectors are faring well.
The manufacturing, agriculture, and professional services sectors in Wales each have the highest level of risk compared to their counterparts across the UK, at 37.9%, 43.7%, and 50.6%, respectively.
Louise continues: “While some sectors might be improving the figures for the region as a whole, it is clear that this level of success has not been replicated by all.
“Potential skills shortages, and the consequential slowdown in hiring across some sectors, may be starting to have an effect on the region.”
Louise adds: “As we saw with the Beast from the East, not all financial shocks are predictable, but can still have a significant impact on company survival. It is important for any firms feeling financially vulnerable to seek professional and qualified advice at the earliest possible opportunity.”