More than 3,000 Shropshire businesses in 'financial distress', report says
More than 3,000 businesses in Shropshire are struggling in "significant financial distress" with directors unsure if they can carry on, according to a new report.
According to figures from Begbies Traynor’s ‘Red Flag Alert’, which monitors the financial health of British companies, the number of ailing firms in the county reached 3,165 in the fourth quarter of 2022, from October to December.
Businesses most affected are in the industrial sector, the report says, with a year-on-year increase of 20 per cent in the number of companies in significant financial distress.
This was followed by real estate and property, which saw an annual jump of 18 per cent.
Nationally, the latest Red Flag Alert research for quarter four in 2022 recorded 610,405 businesses in significant distress, representing a 4 per cent increase since 2021 and 24 per cent surge in significant distress levels compared to pre-Covid times in quarter four of 2019.
Mark Malone, partner at Begbies Traynor in Shropshire, said: “We came into 2022 hopeful that the pandemic was behind us, and better times were ahead, only for Russia’s invasion of Ukraine to unsettle the global economy.
"This led to spiralling inflation and soaring energy bills, and laying the foundations for what looks like a global recession. In the UK in particular, strike action is also piling on the pressure as staff struggle to get to work and customers stay away.
“Many of the companies captured by the Red Flag Alert are SMEs without the financial firepower larger enterprises have to fall back on.
"We should be applauding the directors of these smaller companies which make up the backbone of the UK’s economy for the incredible tenacity they have shown for so long.
“However, we’re taking calls from company directors who are facing multiple challenges to keep their businesses afloat. They are dealing with a gloomy economic outlook with inflation at 40-year highs and interest rates at levels not seen for 14 years. As a result, more and more companies are starting to feel the burden of their debts, making directors question whether they can go on.”
For more, see www.redflagalert.com
