BUSINESS failures in the region rose by four per cent last year despite falls throughout the rest of the country.

A total of 159 receiverships were recorded in the North West in 1998 compared with 153 in 1997 according to figures released by KPMG.

And the signs are that 1999 could be equally tough.

"There are now clear signs that economic conditions are not as good as they were twelve months ago," said Peter Terry, head of corporate recovery for the firm in the North West.

"Last year consumer spending was on the increase, business confidence was high, unemployment was falling and inflation was low. "Today inflation is the only one of these benchmarks to remain unchanged."

And although interest rates cuts have eased some pressures on manufacturing firms struggling with the strength of the pound, other problems are conspiring against local exporters.

"Many companies are expecting difficulties re-negotiating export contracts against a backdrop of sharply reduced foreign demand," said Mr Terry.

Nationally there were 1,054 receiverships in 1998 compared with 1,181 in 1997 - a fall of 11 per cent.

The manufacturing sector took the brunt of the company collapses followed by distribution and construction.

Peter Terry added: "Domestic economic conditions are only part of the problem.

"Following debt re-scheduling in Russia there was widespread financial market turbulence affecting both emerging and industrialised economies."

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