The number of negative announcements made by firms in the region increased by more than 12 per cent in the first three months of 2003 as compared to the same period last year.

Firms in Yorkshire and the North East made 126 such announcements, including profit warnings and details of redundancies, in the first quarter of the year, according to the statistics released by KPMG.

The figure is a 12.5 per cent rise on last year and a 30 per cent rise on the second, third and final quarters of 2002.

The rise reflects the national trend, where there was a 13.5 per cent rise.

But Richard Fleming, the head of KPMG restructuring in the north, said it was not all doom and gloom.

"Clearly, the figures demonstrate the difficulties that many businesses have faced during the first quarter of 2003," he said. "However, I'd question whether there is a lot more large-scale restructuring or crisis activity to come.

"There are some positive signs in the market for the first time since last summer. Either bad news has peaked or we are in the eye of the storm. We have observed a marked slow down in the incidence of new problem cases during the last few weeks.

"The major lenders, who are still busy with a number of large workouts, are reporting reduced levels of new crises.

"This could signal good news for the economy."