Business leaders across the Humber region 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 today (19 October 2022) by leading independent business rescue and recovery specialist Begbies Traynor, reveals that for the three months to September 2022, there was a 4% 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 7% increase in distress on the same period last year.
The data shows that in the third quarter of 2022 more than 1,500 businesses in the Humber region 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.
In the Humber region, the sectors which saw the sharpest increase in ‘significant’ distress year on year were utilities (125%); financial services (78%); leisure and cultural (44%); and travel and tourism (40%).
Businesses across the UK continue to face challenges including supply chain issues, escalating gas and electricity prices and shortages of raw materials. Higher borrowing and debt service costs.
Andrew Mackenzie, partner at Begbies Traynor in the Humber region, 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.
“The current market turmoil and rising interest rates will also tighten constraints on lending to small businesses as well as a triggering a surge in borrowing costs, just at the time when companies are looking for short-term loans to cope with rising prices and the threat of decreasing demand”
He added: “For businesses that are struggling, it is essential to seek professional help as soon as possible to avoid their financial problems escalating.”
