Thousands of Bristol businesses struggling to stay afloat
A total of 7,049 businesses in Bristol are struggling to keep afloat, according to a red flag survey.
According to the latest figures from Begbies Traynor’s ‘Red Flag Alert’, which monitors the financial health of British companies, there was an increase of one per cent on the previous quarter.
Despite the overall flat picture, the latest data has identified specific sectors where businesses are particularly struggling.
The businesses most affected are in the media sector, with a quarterly increase of 12 per cent in the number of companies in significant financial distress.
This was followed by manufacturing, which saw a quarterly jump of seven per cent.
Nationally, the latest Red Flag Alert research for last quarter recorded 610,405 businesses in significant distress.
There has been a 24 per cent surge in significant distress levels compared to pre-COVID times in the fourth quarter of 2019.
The data highlights the intense strain an increasing number of companies are under as they are hit by rising labour and materials costs, increasing energy costs and an economy likely headed into recession.
The most recent County Court Judgements (CCJs), widely seen as a indicator of financial distress, are also climbing rapidly.
There were 23,885 CCJs in the final quarter of 2022, a 52 per cent rise in the level compared to the same period a year ago.
Similarly, Winding Up Petitions, a much more serious legal action lodged by creditors, totalled 576 in the same period, a rise of 131 per cent compared with 2021.
Paul Wood, partner at Begbies Traynor in Bristol, said: “We came into 2022 hopeful that the pandemic was behind us, and better times were ahead, only for Russia’s invasion of Ukraine to unsettle the global economy, leading to spiralling inflation and soaring energy bills, and laying the foundations for what looks like a global recession.
“In the UK in particular, strike action is also piling on the pressure as staff struggle to get to work and customers stay away.
“Many of the companies captured by the Red Flag Alert are SMEs without the financial firepower larger enterprises have to fall back on.
“We should be applauding the directors of these smaller companies which make up the backbone of the UK’s economy for the incredible tenacity they have shown for so long.
“However, we’re taking calls from company bosses who are facing multiple challenges to keep their businesses afloat.
“They are dealing with a gloomy economic outlook with inflation at 40-year highs and interest rates at levels not seen for 14 years. As a result, more and more companies are starting to feel the burden of their debts, making directors question whether they can go on.”