40% more firms are suffering significant distress

THE number of Scottish firms showing signs of “significant distress” was nearly 40 per cent higher in the final quarter of last year compared with the same period of 2016, underlying the challenges posed to business by the fragile economic backdrop.

The figure is revealed in the closely-watched Red Flag Alert from insolvency specialist Begbies Traynor, which found the number of Scottish companies suffering from financial problems was up in double digit percentage terms across almost every industry sector in the last three months of 2017.

Ken Pattullo, head of Begbies Traynor in Scotland, declared: “The apparently relentless onward march of distress right across the Scottish economy is tremendously worrying.”

The figures were reported as official figures showed that the Scottish economy grew by just 0.2 per cent in the third quarter. UK growth was 0.4 per cent for the period.

Begbies Traynor said 26,111 Scottish businesses reported “significant” distress levels in the fourth quarter of last year, up 37 per cent on the comparable period the year before. Significant distress is defined as companies showing early warning signs of financial difficulties.

The survey found cases of “critical distress” were up 12 per cent compared with the fourth quarter of 2016, and 35 per cent up onquarter three – the highest hike in the UK.