Major rise in regional firms on the critical list

THE number of companies facing ‘critical’ financial distress has doubled in Manchester over the last three months, and risen by 63% in Liverpool, according to Begbies Traynor.

The firm has published the latest statistics from its Red Flag Alert, which monitors signs of company distress such as County Court Judgments for unpaid bills and late filing of company accounts.

It found that the sectors hardest hit were the real estate and property services market, which saw a four-fold increase in the number of firms showing ‘critical’ signs of distress in Greater Manchester. In Liverpool, there was a 23% rise in the number of construction firms showing signs of financial distress.

John Fairbrother, partner at Begbies Traynor in Liverpool, said: “It is of little surprise that the construction sector is under particular pressure as it is vulnerable to reductions in both capital and revenue spending by the public sector through central and local government and by private sector businesses trying to conserve cash.”

Gary Lee, a partner at Begbies Traynor in Manchester, said: “Businesses throughout the UK are feeling the strain and Manchester is no exception.

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“After a relatively soft period for business failure in 2011 compared to previous recessions, companies across key sectors now look to set to face their toughest times as the UK economy looks likely to face increased business distress in the coming months.  We are moving to a deeper stage of the recessionary cycle.”