Scotland’s manufacturing sector is showing sings of increased financial resilience, according to new research.
A study conducted by insolvency trade body R3 found Scottish manufacturers were marginally less likely to go to the wall than equivalent companies in other parts of the UK.
The research found 22.4% of manufacturing firms in Scotland were at “higher than normal” risk of insolvency.
The comparable figure for the UK as a whole is 23.1% , with London coming in at 29.9%, Wales at 24.1% and the south east of England registering the same mark.
R3’s insolvency risk tracker data is compiled using Bureau van Dijk’s Fame database and measures the proportion of businesses across key sectors that have a heightened risk of financial failure in the coming year.
R3 chairman Tim Cooper who is a partner with Gateley in Edinburgh said the research showed that while challenges remained, the manufacturing sector in Scotland was relatively stable.
“Despite concerns that growth in manufacturing is slowing, the sector appears to be fairly secure in terms of financial stability across the UK,” Mr Cooper said.
“It is particularly encouraging to see the rate of companies at high risk in Scotland has been falling in recent months.”
Mr Cooper said companies that were experiencing distress needed to take action as soon as possible to protect their interests.
“The manufacturing sector is a very important one in the Scottish economy, particularly as a source of employment, so it is vital for businesses to remain on top of their finances,” he added.
“Business owners should keep a close eye on their cash flow and seek professional advice at the first sign of financial difficulties.
“The earlier problems are tackled the better the chance of a successful turnaround.”