Distress rates ring alarm for North-West firms

Business Health Statistics

| January 25th 2023

More News by Gary Lee

Date Published: 25th January 2023

Distress rates ring alarm for North-West firms
  • 20% surge in significant distress levels compared to Q4 2019
  • 2% year-on-year rise in significant distress
  • Begbies Traynor says more than 57,000 NW firms remain in danger

New data published today by Begbies Traynor (25th January 2023) indicates businesses are still battling the legacy impact of Covid debt and are deeply troubled by inflation.

Begbies Traynor say more than 57,000 (57,003) businesses are now on the brink and operating under significant financial distress – a 20% rise from the same pre-pandemic period in 2019 (47,653).

It also found that 286 firms in the region were in ‘critical distress’ in Q4 of 2022 – a single year increase of 20% (up from 239).

The Red Flag Alert data, published by Begbies Traynor, has analysed the health of companies across the region for more than 15 years.

Of the firms in significant distress, 24,717 are from Greater Manchester and 9,226 are based in the Liverpool City Region.

Nationally, more than 600,000 firms are now in significant financial distress (610,405).

Gary Lee, Partner at Begbies Traynor, 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 the North West 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 the North West:

  1. Support Services (9,477)
  2. Real Estate & Property (8,218)
  3. Construction (7,295)
  4. Professional Services (3,897)
  5. General Retailers (3,763)
  6. Telecoms (3,265)
  7. Health and Education (3,253)
  8. Manufacturing (2,036)
  9. Media (1,891)
  10. Bars and Restaurants (1,864)

About the author

Gary Lee

Partner

Meet our Team of Experts

Gary is a Fellow of the Institute of Chartered Accountants in England and Wales and a Licensed Insolvency Practitioner with over 20 years experience in the profession.

He has worked extensively with Banks, Asset Based Lenders & Private Equity on mid market & SME assignments. He has a broad range of experience gained through a variety of assignments, working on formal insolvency appointments, informal workouts, debt negotiations and independent business reviews.

Network of Over 100 UK Offices

Find your local Begbies Traynor Group office and speak to an adviser today.

Find your Local Office
0800 063 9221

Call our Confidential Advice Line. Calls to this number are free of charge.

Call us now...
Request a Meeting

We invite you to come and discuss your enquiry with us at your convenience.

Request a meeting...
0800 464 0871

Call our Confidential Advice Line. Calls to this number are free of charge.

Call us now...
Request a Meeting

We invite you to come and discuss your enquiry with us at your convenience.

Request a meeting...
0161 837 1700

Call our Confidential Advice Line. Calls to this number are free of charge.

Call us now...
Request a Meeting

We invite you to come and discuss your enquiry with us at your convenience.

Request a meeting...
Begbies Traynor Group plc, announces that it has completed the acquisition of CVR Global LLP
CVR is a leading independent firm of insolvency practitioners, forensic accountants and experts in other related complementary disciplines.
Read More →
 
Coronavirus pushes financially distressed companies over the half-million mark
Number of businesses in significant distress stands at 509,000 – the highest number measured by the Red Flag Alert research
Read More →
 
BTG Advisory accelerates growth with appointment of four new partners to its London office
BTG Advisory, the boutique advisory arm of Begbies Traynor Group announces the appointment of four new partners to its Canary Wharf office
Read More →
 
Eighty jobs saved with £1m sale of engineering business
South Yorkshire company Newburgh Precision rescued through administration
Sale enables 75-year-old business to continue trading
Read More →
 
Join thousands of professionals by signing up for our updates
Analysis and Opinion from our Partners
Top Industry News
Register Now →
 

Advice you can trust

We are accredited by the following industry leading organisations

Insolvency Practitioners Association Institute of Chartered Accountants in England and Wales R3: Association of Business Recovery Professionals ICAEW Business Advice Service Turnaround Management Association ICAS | The Institute of Chartered Accountants of Scotland

Contact the Begbies Traynor Group team

or Find your Nearest Office

Here at Begbies Traynor Group we take your privacy seriously and will only use your personal information to contact you with regards to your enquiry. We will not use your information for marketing purposes. See PRIVACY POLICY

Processing...

This site uses cookies to monitor site performance and provide a more responsive and personalised experience. You must agree to our use of certain cookies. For more information on how we use and manage cookies please read our PRIVACY POLICY