Increase in advanced financial distress for businesses

Struggles: Lawrence O’Hara

NORTHERN Ireland is seeing marked increases in severe financial distress in both business-to-business and consumer-facing sectors, according to new research.

The data from insolvency specialist Begbies Traynor showed that in the third quarter of 2019 ‘critical’ distress in the province’s construction sector rose by 55% on the previous period.

And the firm’s Red Flag Alert said critical distress levels were up 80% in bars and restaurants — as well as tripling in support services.

The numbers of sectors in critical distress was higher in Northern Ireland than the rest of the UK, up by 51% on the same time last year and up by 76% on the previous quarter.

In contrast, there was an increase of just 8% year on year, and of 4% quarter on quarter across the UK as a whole.

Lawrence O’Hara, who leads Begbies Traynor in Northern Ireland, said: “Having put in a relatively strong performance in quarter two of 2019, we are now seeing Northern Ireland once again struggling with key sectors such as construction again in the doldrums.

“Given the last three years of economic disruption since the 2016 referendum, this is hardly surprising — businesses here, as in the rest of the UK, are suffering from the ongoing uncertainty and a lack of investment.

“With the province’s crucial position within the current negotiations and the far-reaching and critical impact on Northern Ireland, this is even more pronounced — it is almost impossible for businesses to plan for the future.

“This is also affecting consumer-facing sectors such as bars.”