2024 challenges loom despite economic recovery

Research has shown a decrease in debt owed by companies in liquidation and a decline in the number of local companies with overdue invoices in the East Midlands.

R3, the UK’s insolvency and restructuring trade body, reported a 28.17% reduction in the levels of debts owed by businesses in liquidation in November compared to October.

While, the number of local companies with overdue invoices has been decreasing since May, although the latest monthly statistic remains relatively high at 23,229.

R3 Midlands, using data from Creditsafe, also presents a mixed scenario for start-ups in the region.

While there was a 4.43% decrease in the number of new businesses in November compared to the previous month, the latest figure of 2,419 represents an 8.23% increase compared to November 2022.

R3 Midlands chair Stephen Rome said: “East Midlands businesses have been battling economic issues for three-and-a-half years now, and corporate insolvency numbers have been rising as more and more directors run out of options. It is encouraging to see some improvements in cash flow conditions, as well as evidence of entrepreneurial appetite, but as we head into 2024, inflation remains high and core prices continue to rise.

“It’s impossible to predict whether the current Christmas trading period will be a badly-needed boost for local firms or the final blow. It’s critical, therefore, that directors are alert to any signs of financial distress and act on them promptly. There is a significant amount which can be done to rescue and support East Midlands businesses, beyond traditional insolvency solutions, if help is taken early enough.”