New figures reveal a 3% leap in the number of North West businesses suffering significant financial distress at the end of 2018.
The latest Red Flag Alert report produced by Begbies Traynor monitors the financial health of companies across the North West. Experts say that 46,477 businesses ended Q4 of 2018 in significant distress, up by 1,393 from the previous quarter (45,084).
The sector hardest hit during the run up to Christmas was Industrial, Transportation & Logistics which saw an 8% increase (taking the total number to 1,180) on the previous quarter. The Financial Services sector and the Real Estate & Property sector both saw a 7% increase in the number of firms in distress (938 and 4,465 in total).
Low levels of Christmas trading impacted the high street with retailers suffering a 4% rise in distress levels taking the number of troubled retailers in the region to 3,228.
The sectors with the highest volume of companies in significant distress were Support Services (12,536) and Construction (6,090).
Speaking from his office in Manchester, Gary Lee, partner at insolvency experts Begbies Traynor, said:
“Carnage on the high street was probably the highest profile story at the end of 2018 and across our region we have certainly not been immune to this. It’s not all about the high street though and sectors such as property and construction faced severe challenges.
“The figures relating to the property and construction sectors are proof that businesses are facing a squeeze despite visible evidence of new developments springing up in our towns and cities.
“The final quarter of trading before Brexit happens is now a key period for companies. 2019 will be another year of change and uncertainty and company directors, whatever sector they operate in, will see it as a true test of their business acumen.”
Red Flag Alert has been measuring and reporting corporate financial distress since 2004, and over that time has become an industry benchmark of the underlying health of companies across every sector and region of the UK.
Through its unique algorithm, the Red Flag Alert measures corporate distress signals, drawing on factual legal and financial data from a wide range of relevant sources, including intelligence from Begbies Traynor.