South East: Transport sector grows by nearly 20%, says R3

Transport has become the fastest-growing sector in the South East with the number of active companies rising by 19.9% between January 2015 and January 2016, according to latest figures from the Southern Committee of R3.

The statistics show that there were 5,759 active transport and haulage companies in the region in January 2016, an increase of 955 since the same time last year.

This trend was reflected across the UK with the number of transport and haulage companies increasing by 27.9% during the year.

The other most popular sectors for business start-ups in the South East during 2015 were restaurants, which rose by 9.8% or 493 new businesses, and construction, which gained 3,588 new businesses, an increase of 9.3%.

The research, compiled by insolvency trade body R3 using Bureau van Dijk's 'Fame' database of company information, tracks the number of active businesses across key sectors and the proportion of businesses that have a heightened risk of entering insolvency in the next 12 months.

However, the figures show that transport and haulage is one of the most risky sectors, with 35% of the active businesses at higher than normal risk of insolvency this month, an increase of 1.5% from December 2015.

As well as having a high number of new start-up businesses in 2015, the restaurant industry has the highest proportion of businesses at risk of insolvency in the South East, with 39.4% at high risk or caution this month.

Andrew Watling, chairman of the Southern Committee of R3 and partner at Quantuma, said: "The increasing popularity of Internet shopping and home deliveries could explain the tremendous growth in the transport and haulage industry but could also be due in part to the 'Uber effect' which has brought a wave of new entrants into the taxi market after launching in Portsmouth in 2015.

"The drop in fuel prices, falling below £1 a litre for the first time since 2009, is also likely to have encouraged the industry. However, this month we have seen an increase in the amount of transport and haulage businesses at risk of insolvency, at a time you would expect there to be great demand for haulage across the country to ensure shops are well stocked.

"Businesses that are struggling need to seek professional advice before it's too late. The high risk scores for this sector does, to some extent, take account of the high number of start-ups, which by their very nature are more vulnerable than established firms. Entrepreneurs starting out within these sectors need to manage their businesses carefully and get a firm grip on their finances and cashflow in particular."