Increase in firms showing distress
34,200 businesses in the region facing challenges
MORE THAN 34,200 Yorkshire businesses experienced ‘significant distress’ in the final quarter of 2021, according to a new study.
Bosses at business rescue and recovery specialist Begbies Traynor, which carried out the research, said the region’s businesses had been on a rollercoaster since the pandemic started, which made planning extremely difficult.
In a statement, Begbies Traynor said: “Despite some signs of economic recovery earlier last year, the final quarter of 2021 saw a marked rise in instances of earlystage financial distress compared with the previous quarter as businesses in Yorkshire, along with the rest of the UK, reeled from the impact of the latest Covid variant, following two years of pandemic disruption.”
According to the latest Red Flag Alert data, published by Begbies Traynor, businesses in Yorkshire experienced a 4 per cent rise in ‘significant’ distress, which refers to businesses that have had CCJs of less than £5,000 filed against them, in the fourth quarter of 2021, compared with the previous three months.
The statement added: “This was slightly lower than the rest of the UK which experienced a quarter on quarter increase of 5 per cent. In Yorkshire, over 34,200 businesses saw this type of distress in the final quarter of last year, and more than 589,160 businesses across the UK were affected.”
The statement added: “In terms of levels of more advanced or ‘critical’ distress, which refers to companies that have financial problems such as CCJs of more than £5,000 filed against them, in Yorkshire there was a rise of 12 per cent compared with Q3 2021 while the UK as a whole saw only a slight rise of 1 per cent. The region also experienced a 46 per cent increase in advanced distress compared with the same period the previous year, while the UK average was an uplift of 7 per cent compared with Q4 2020.”
Julian Pitts, regional managing partner for Begbies Traynor in Yorkshire, said: “Businesses in Yorkshire, like those across the UK, have been on a rollercoaster ride of change and uncertainty over the last two years, making planning and forecasting extremely difficult.
“The unprecedented challenges they have faced range from stop-start operations amid successive lockdowns, to adapting to ever-changing Covid restrictions, and now dealing with ongoing issues around severe staff shortages and global supply chain disruption.”