Pandemic taking toll as ‘1,200 firms in distress’
More than 1,200 businesses in Bath are in significant financial distress, says a new report.
According to the latest figures from independent insolvency firm Begbies Traynor, 1,224 Bath businesses are struggling - an increase of 12 per cent since the same time last year in 2019.
Uk-wide, there are 557,000 businesses in significant distress, says the firm. This figure is up six per cent on the previous quarter and nine per cent since lockdown in March.
In Bath, Somerset businesses in some sectors faced greater financial difficulty than others, including real estate and property and construction, increasing seven per cent and 10 per cent respectively between Q2 and Q3 2020.
Even though some sectors showed some signs of relative stability including professional services and health and education many businesses will be bracing themselves for what is to come over the next three to six months.
Neil Vinnicombe, partner at Begbies Traynor in Bath, said: “Bath businesses continue to face multiple challenges from unpredictable consumer demand to restrictions on the way they offer their services, as well as managing the direct health impact of the pandemic on their workforce.
“This is undoubtedly taking its toll, as reflected in these regional figures.
“It is noteworthy that the number of businesses in significant distress has grown substantially in the last three months, even with court capacity significantly reduced due to the pandemic.
“As such, there could be a significant number of insolvencies when the courts do get back to anywhere near normal capacity and attempt to clear the backlog of pending cases.
“This, combined with the end of the furlough scheme at the end of October and other government support measures, is likely to have a material impact on the business failure rate.
“Unfortunately, a combination of a grim economic data, and very poor trading conditions, particularly in the most vulnerable sectors such as hospitality will take its toll and this is expected to feed through to Q1 2021 as restrictions continue.”