Eight in ten firms showing signs of distress, says insolvency body

MORE than eight out of ten businesses in the north of England are experiencing signs of distress – a higher proportion than any other English region, according to the insolvency trade body R3.

The association’s Business Distress Index said that 83% of firms in the north showed at least one of the signs of distress including falling sales or profits, pay freezes or cuts, redundancies, cashflow difficulties or asset sales. This compares with 78% of businesses in the Midlands and 71% of firms in the south.

Jeremy Oddie, chair of R3 in the North West, said: “The overall picture suggests that conditions for businesses have become more challenging. Although the adverse weather will have had some affect on the figures, it is still concerning to see one in five businesses in the region is finding it hard to pay invoices on time, given that an inability to pay bills is the definition of insolvency.

“This, coupled with the fact that nearly a quarter of firms are using the maximum overdraft facility more often, suggests that many businesses are running on empty.
“Any increase in interest rates could push them over the edge.”