Yorkshire hit by rise in critical business distress
The number of businesses affected by the most serious levels of business distress has risen by a third in Yorkshire since Q4 2017, according to the latest Red Flag Alert research data published today (30 January) by Begbies Traynor, the UK’s leading insolvency firm.
Although the numbers of companies involved are relatively small, at only 146 firms in total, the region’s 33% increase in ‘critical’ distress, which relates to businesses that have had winding up petitions or county court judgements of more than £5,000 taken out against them, is higher than the UK’s, which rose by 25% year on year in the last three months of 2018.
Across the country as a whole, 2,183 business were classed as ‘critically’ distressed in Q4 2018, with a further 481,590 showing symptoms of less severe ‘significant’ distress, a figure which increased by 3% quarter on quarter.
Yorkshire also saw a 3% climb in ‘significant’ distress on Q3 2018 to affect 29,088 businesses, and a 2% fall year on year. Since Q3 of last year, the region’s property, sport, automotive and construction sectors all experienced increases in ‘significant’ distress of more than 5%, with property and real estate the hardest hit, seeing an 8% hike and now affecting 2,744 firms in the sector.
Julian Pitts, regional managing partner for Begbies Traynor in Yorkshire, said: “Despite the mounting tensions and confusion over the future of the country surrounding Brexit, Yorkshire’s businesses seem to be holding it together. There are major concerns though that this could be the relative calm before an impending economic storm, depending on how and when Britain departs from the European Union.
“Businesses, and SMEs in particular, need to be ready for some tough trading conditions ahead, with the most rigorous management structures in place and cashflow closely monitored, as we prepare to enter the uncharted waters of a post-Brexit economy.”