According to new research by insolvency trade group R3, Scotland’s manufacturing sector has shown “increasing signs of financial security” in the last few months. The proportion of businesses in the sector with a “heightened risk” of insolvency has fallen every month since February.

A total of 22.4% of manufacturing businesses are considered at higher than normal risk of insolvency according to the June survey, which is below the UK average of 23.1%. This places Scotland ahead of London (29.9%), Wales (24.1%) and the South East (24.1%).

Tim Cooper, chairman of R3 in Scotland and a partner at the Gateley Edinburgh law firm, said: “Despite concerns that growth in manufacturing is slowing, the sector appears to be fairly secure in terms of financial stability across the UK. It is particularly encouraging to see that the number of companies at high risk in Scotland has been falling in recent months.

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.

“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 turn-round.”