Latest data shows businesses facing financial distress in Nottingham and Derby
The latest data from Begbies Traynor’s ‘Red Flag Alert’ reveals alarming trends in the financial health of businesses in Nottingham and Derby.
Both cities have experienced year-on-year increases in the number of companies facing economic distress.
In Nottingham, the figures for Q1 2024 showed 2,284 businesses classified as being in ‘significant’ economic distress, representing a 31.9% annual rise.
Sectors such as construction and telecoms & IT have been particularly hard-hit, with annual increases of 54.2% in the number of companies grappling with financial distress.
Similarly, Derby has witnessed a notable uptick in businesses facing economic hardship, with 699 companies categorised as being in ‘significant’ distress, marking a 30.4% annual increase, reflecting the mounting financial pressures confronting local businesses.
Sectors such as support services and professional services have borne the brunt, experiencing annual increases of 40.9% and 33.3% respectively in the number of companies facing financial distress.
Nationally, the scenario is equally concerning, with over 550,000 businesses reporting financial distress during the first quarter of 2024.
The proportion of businesses facing ‘critical’ financial distress has also surged by 20.1% compared to Q1 2023, with 40,174 UK businesses affected.
Kris Wigfield, partner at Begbies Traynor in Nottingham, said: “The macroeconomic conditions that made last year so difficult have continued to exert unrelenting pressure on corporate balance sheets. Despite some optimism as we entered the new year, 2024 has so far been characterised by a continuation of the same pressures
that plagued companies in the UK throughout 2023.
“As a result, this latest data shows a marked increase in firms moving towards insolvency compared to the same period last year. Unfortunately, there’s no quick fix for our economy, and with inflation falling slower than expected, the hope of a significant fall in interest rates shortly seems to be fading. Sadly, the pressing issues facing many businesses today will simply push many over the edge and contribute to the current high level of UK corporate insolvencies.”
