Firms in the region face more distress
BUSINESSES in Birmingham and the West Midlands face another tough year, according to Begbies Traynor’s Red Flag Alert, a quarterly benchmark of company distress.
John Kelly, regional managing partner at the corporate recovery specialist’s Birmingham office, said: “After a relatively soft period for business failures in 2011 compared with previous recessions, firms across key sectors now look set to face their toughest times so far as the UK economy looks likely to experience increased business distress in the coming quarters.
“Trends evident in the Red Flag Alert demonstrate that we are likely to be approaching a crucial period for businesses large and small.”
The latest figures show the Midlands region had 829 critical problems in the fourth quarter of 2011 against 547 in the same period in 2010 – up 52 per cent.
Birmingham, by contrast, had 145 critical problems in Q4 2011 against 332 in the same period in 2010 – down 56 per cent.
But Kelly cautioned against reading too much into what he described as a statistical anomaly in the Birmingham figures.
“The figures for areas like Stoke and Leicester show a sharp increase and there is no reason to imagine that Birmingham is in any way immune. We would expect to see Birmingham showing a similar surge in critical problems in the first quarter of this year as the renegotiation of banking arrangements maturing loans, rental quarter days and the phasing out of Time to Pay start to impact in a big way,” he said.
