More businesses showing early signs of distress
Almost 35,000 Yorkshire businesses showed symptoms of early stage distress in the third quarter, up 5% from the numbers in the second quarter and 6% from the third quarter of 2021, according to Red Flag Alert.
Nationally, more than 600,000 businesses suffered ‘significant’ distress in the last quarter, including county court judgements (CCJs) of less than £5,000, according to the data published by independent business rescue and recovery specialist Begbies Traynor.
The figures also revealed a rise in the number of firms displaying the more advanced symptoms of ‘critical’ distress which include having CCJs of over £5,000 filed against them. In Yorkshire, ‘critical’ distress increased by 13% on the previous quarter – and by 15% year on year.
Nationally, the quarterly increase in ‘critical’ distress was 7% and the annual increase 25%.
Julian Pitts, regional managing partner for Begbies Traynor in Yorkshire, said: “There’s no doubt that the economic climate is currently extremely bleak and there’s no real end in sight.
“Businesses are now facing a myriad of new challenges. Not only are shortages of raw materials and labour pushing up costs, with consumers likely to bear the brunt of rapidly rising prices, there are also supply chain issues, including severe driver shortages and escalating fuel costs.”
He added: “For those business that are struggling, it’s essential that they seek professional help as soon as possible to avoid their financial problems escalating.”
The sharpest increase in ‘significant’ distress year on year in Yorkshire were utilities (24%); real estate and property services (20%); professional services (8%); and hotels and accommodation (8%).
Only two sectors – bars and restaurants, and printing and packaging – experienced a decline in ‘significant’ distress compared with the same period in 2021.
Businesses across the UK continue to face challenges including supply chain issues, escalating gas and electricity prices and shortages of raw materials.
