New data published today by Begbies Traynor (24th January 2023) indicates businesses are still battling the legacy impact of Covid debt and are deeply troubled by inflation.
Begbies Traynor say more than 10,000 (10,185) businesses are now on the brink and operating under significant financial distress – a 17% rise from the same pre-pandemic period in 2019 (up from 8,696).
It also found that 54 firms in the region were in ‘critical distress’ in Q4 of 2022 – a single year increase of 8% (up from 50).
The Red Flag Alert data, published by Begbies Traynor, has analysed the health of companies across the region for the last 15 years.
10,185 firms in Lancashire remain in ‘significant distress’. This is a 2% increase on the same period last year (9,957).
Nationally, more than 600,000 firms are now in significant financial distress (610,405). Chris Lawton, Insolvency Director at Begbies Traynor in Preston, said:
“The difference between pre-pandemic business conditions and now is stark. These figures highlight the gloom in the economic climate since the pandemic. Company directors must stay alert and act quickly and decisively as we progress into 2023 which is already bringing its own challenges.
“The conversations we’re having with company directors in Lancashire indicate these challenges are being faced in all sectors of our regional economy. It’s clear that business owners are working hard to tackle rising
inflation, soaring energy bills and doing their best to ward off the impact of what looks like a looming global recession but in too many cases it won’t be enough.
“The scenes of industrial action being taken in the public sector symbolise the strain felt by those in the private sector too who are under pressure to deliver pay rises where revenues are flatlining or even declining.
“It will not be unexpected to see further cutbacks on goods and services in some key sectors of our regional economy. The challenge for businesses is to remain competitive and they should plan strategically through further financial strain by restructuring their organisation or their debts. As interest rates rise and a less generous energy support scheme kicks in, there is more pain to come for SME’s in the region.”
Top ten sectors in significant financial distress by volume of firms based in Lancashire:
More Begbies Traynor News
Contact Begbies Traynor Group
You're in Safe Hands