Number of companies in financial crisis falls
Fewer Northern Ireland firms are in severe financial difficulties than before, according to the latest study to indicate that economic conditions are improving.
However, firms in construction, retail and property are still facing tough conditions, the Red Flag Report from business rescue and recovery firm Begbies Traynor said.
The report found that 34% fewer firms in Northern Ireland had 'critical problems' in the first three months of this year compared to the final quarter of 2013.
A 'critical problem' represents having three County Court Judgements (CCJ) totalling £5,000 or more and/or having a winding-up petition or being in a voluntary arrangement.
Just 37 Northern Ireland companies were designated in this category during the January to March period, compared to 56 in the previous three months.
The construction sector accounted for 30% of the businesses with critical problems in the first three months of 2014, with a further 18% being in general retailing. The real estate and property services sector was responsible for 6%.
Joan Houston, partner at the Northern Ireland office of Begbies Traynor, said that the report is the latest in a long line which have pointed to improving economic conditions in the province.
"The housing market has continued recovering in terms of prices and transaction volumes, and private sector companies have been reporting rising new orders and business output," she said.
"With conditions improving, some of the pressures on companies inevitably eases.
"In the first quarter of the year, the construction sector continued to account for the largest proportion of local businesses with critical problems, but this eased to 30% from 36% in the previous quarter, reflecting, amongst other things, the ongoing improvements in the housing market," she said.
When it comes to the report's less serious category of having 'significant problems', there was little change quarter-on-quarter.
Just over 3,710 Northern Ireland firms were considered to be experiencing 'significant problems' in the first quarter of 2014, compared to 3,643 in the final three months of 2013, representing an increase of 2%.
Of all the UK regions, only London saw a fall in the number of firms with significant problems.