NW firms feel heat as 6% hike in distressed companies leaves 46,063 firms on brink

Lee Gary

New figures released today revealed a 6% jump in the number of businesses across the region experiencing ‘significant distress’ compared with the same time a year ago.

The latest Begbies Traynor Red Flag Alert research, which monitors the financial health of companies across the UK, found that 46,063 businesses across the North West region experienced significant distress in the second quarter of 2018.

Despite this, levels of financial distress are increasing at a much slower rate, year-on-year, than during the previous four quarters (Q1 2018: 31%, Q4 2017: 34%, Q3 2017: 26%, and Q2 2017: 24%) reflecting a more positive trading environment in many sectors than a year ago.

Sectors hardest hit in terms of sheer volume of distressed firms during the second quarter of 2018 were: Support services (12,374 – up by 11% year-on-year); construction (6,029 – no change); and real estate (4,071 – up by 16% year-on-year).

Retailers in the region are also feeling the pinch with 3,161 (up by 1% year-on-year) experiencing significant distress.

Gary Lee, partner at Manchester-based Begbies Traynor, said: “Warmer weather and the Royal wedding helped to stimulate some areas of the regional economy in Q2 of this year.

“More fundamental issues, however, such as higher levels of employment, increased consumer confidence and interest rate stability has supported this positivity.

“As the UK heads into a key stage of negotiations with the EU on future trade arrangements we must continue to pay close attention to the troubles of firms across our region.”

He added: “Many key sectors of employment in the North West, such as retail and construction are continuing to feel the squeeze and companies in the supply chain of these sectors are at risk of being affected.”

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