Business leaders across Yorkshire are being warned of financial difficulties ahead as new research reveals an increase in the number of companies experiencing ‘significant’ or early distress in Q3 2022.
The latest Red Flag Alert data, published 19 October by leading independent business rescue and recovery specialist Begbies Traynor, reveals that for the three months to September 2022, there was a 5% increase in the number of businesses in ‘significant’ distress in the region, compared to the second quarter of the year. The figures also reveal a 6% increase in distress on the same period last year.
The data shows that in the third quarter of 2022 almost 35,000 businesses in Yorkshire displayed symptoms of early-stage distress. They include firms with minor county court judgements of less than £5,000 filed against them.
Nationally, more than 600,000 businesses suffered ‘significant’ distress in the last quarter.
Begbies Traynor’s 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%.
In Yorkshire, the sectors which saw the sharpest increase in ‘significant’ distress year on year 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.
Julian Pitts, (pictured) 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.”