More than 30,000 East Midlands businesses are experiencing “significant” financial distress as rising costs and weak confidence continue to put pressure on companies across the region.<\/p>\n
New figures from financial and real estate advisory group BTG’s latest Red Flag Alert show 30,695 East Midlands companies were in significant financial distress during the second quarter of 2026, up 0.2% on the same period last year.<\/p>\n
The picture varied considerably between counties.<\/p>\n
Derbyshire recorded the sharpest deterioration, with the number of distressed businesses climbing 5.8% to 5,564. Northamptonshire also saw an increase of 1% to 6,435.<\/p>\n
However, Leicestershire recorded a 1.3% fall to 9,891 businesses, while Nottinghamshire saw numbers decrease by 2% to 8,805.<\/p>\n
Across the wider Midlands, the number of companies in the more serious category of “critical” financial distress increased 10% year-on-year to 6,301, ahead of the UK-wide increase of 9%.<\/p>\n
A total of 80,499 Midlands businesses were classed as being in significant financial distress, although that figure was down 0.4% year-on-year.<\/p>\n
Construction remained one of the sectors under greatest pressure, with 11,996 distressed companies across the Midlands. Support services accounted for 11,483, while the number of struggling real estate and property businesses jumped 7.4% to 10,893.<\/p>\n
Carolynn Best, partner at BTG’s Leicester office, warned that persistent distress could translate into further company failures.<\/p>\n
She said: “The national picture of uncertainty and businesses holding back on decisions while waiting to see what comes their way after the summer is reflected in the East Midlands.<\/p>\n
“Like in other regions, consumer facing sectors have felt the brunt of the drop in spending and confidence, while industries like construction and real estate sectors have suffered the knock-on impact of rising costs and interest rates brought about by macroeconomic factors.”<\/p>\n
Best warned that an increase in winding-up petitions alongside persistent financial distress could be a precursor to more insolvencies.<\/p>\n
She added: “There is a potential house of cards forming that could quickly collapse should the landscape worsen for businesses.<\/p>\n
“Should this mean a wave of insolvencies is round the corner, this ominous sign is an opportunity for businesses in the East Midlands to get ahead of the game to seek advice while they have more options available to them.”<\/p>\n
Across the UK, 53,756 businesses were classified as being in critical financial distress during the second quarter, an increase of 9% year-on-year.<\/p>\n
The number experiencing significant financial distress increased 1% to 674,030.<\/p>\n","protected":false},"excerpt":{"rendered":"
Derbyshire businesses face mounting pressure as construction and property sectors struggle most<\/p>\n","protected":false},"author":25,"featured_media":2111562,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[53262],"coauthors":[95],"class_list":["post-2114191","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-news","tag-east-midlands","tag-featured-story"],"yoast_head":"\n