Yorkshire sees increase in critical business distress amid ‘mounting tensions’ over Brexit

The number of companies in Yorkshire affected by the most serious levels of business distress has risen by a third since Q4 2017, according to Red Flag Alert research data published by insolvency firm Begbies Traynor.

The region has seen a 33% increase in ‘critical’ distress, which relates to businesses that have had winding up petitions or county court judgements of more than £5,000 taken out against them.

Although there were only 146 firms across Yorkshire included in the new data, the increase in distress levels is higher than the UK’s, which rose by 25% year on year in the last three months of 2018.

Yorkshire also saw a 3% rise in ‘significant’ distress on Q3 2018 to affect 29,088 businesses, and a 2% fall year on year.

Since Q3 of last year, the region’s property, sport, automotive and construction sectors all experienced increases in ‘significant’ distress of more than 5%. Property and real estate have been the hardest hit, seeing an 8% climb and now affecting 2,744 firms in the sector.

Julian Pitts, regional managing partner for Begbies Traynor in Yorkshire, said: “Despite the mounting tensions and confusion over the future of the country surrounding Brexit, Yorkshire’s businesses seem to be holding it together.

“There are major concerns though that this could be the relative calm before an impending economic storm, depending on how and when Britain departs from the European Union.

“Businesses, and SMEs in particular, need to be ready for some tough trading conditions ahead, with the most rigorous management structures in place and cashflow closely monitored, as we prepare to enter the uncharted waters of a post-Brexit economy.”