Southampton: Hampshire group R3 reports South East growth in tech and construction

The South East was a popular place for new technology and IT, and construction companies setting up over the last 12 months, according to a group of Hampshire experts.

The Southern Committee of R3, which brings together insolvency practitioners from local accountancy, legal and recovery firms, has revealed that the number of active companies in the tech and IT sector rose from 36,507 to 39,102 from July 2014 to 2015, and the number of construction companies grew from 37,758 to 40,293.

While the figures paint a positive picture for businesses in the South East the proportion of those at high risk of insolvency has also risen, with a 17% increase across both sectors in the last year. The proportion of companies at higher than normal risk of insolvency currently stands at 36.4% in technology and IT, and 30.4% in construction.

Andrew Watling, chairman of the Southern Committee of R3 and a partner at Quantuma in Southampton, said: “It’s obviously encouraging to see a real upturn in the amount of new businesses entering the market in the region, but we need to look at the whole picture and recognise that many may need advice on how to keep things afloat.

“In technology and IT it’s relatively easy for companies to enter the market but many find it difficult to stabilise and grow once there.

“It can be easy for construction companies to run into financial difficulty. The sector tends to be more susceptible to issues in the wider economy than others, and problems such as late payment are rife and put unnecessary pressure on cash flow.

“Looking at the figures we’d urge any businesses that are struggling to seek professional advice before it’s too late.”