Over 1,500 Swindon businesses in deep financial trouble
As the cost of living crisis continues, new figures have revealed that hundreds of Swindon businesses are feeling the financial pinch.
According to Begbies Traynor’s “Red Flag Alert”, which monitors the financial health of UK businesses, 1,567 businesses in Swindon found themselves in “significant” financial distress in the second quarter of 2022.
While that amount is a 13% year-on-year decrease over the same period in 2021, when many businesses were closed due to Covid-19 lockdowns, the report says there are evidence that some of the region’s industries continue to struggle.
Struggling industries include professional services and retail trade, which are both seeing the biggest quarterly increases, posting increases of 6% and 7% respectively between the first and second quarters of 2022.
The cost of living crisis has seen energy costs soar, with some businesses having to pay double or more for their gas and electricity. Rising inflation, scarcity and rising costs of labor and materials, and loss of consumer confidence have also contributed to worsening financial difficulties.
Nationally, the latest Red Flag Alert research for the second quarter of 2022 recorded 582,452 businesses in high difficulty as businesses continue to be impacted by all of these factors.
Evidence of this financial distress comes in the form of County Court Judgment (CCJ) data which is being used as a harbinger of future insolvency, which revealed 46,235 rulings in the first six months of 2022, up 5% from the first quarter, as creditors tried to collect debts.
This compares to 59,042 CCJs for the whole of 2021, with this year’s figure rising as the court backlog clears and debts are pursued.
Commenting on the figures, Julie Palmer, partner at Begbies Traynor in Swindon, says:
“While the number of struggling Swindon businesses is currently stable, a combination of economic problems have taken their toll on reducing business and consumer confidence.
“Many businesses are struggling in a climate of rising costs, but the environment will only get worse, not better, at least until next year.
“I fear it will be a difficult fall as the companies that have struggled for so long are finally overwhelmed.
“That’s why it’s so important that any business facing financial difficulty, for whatever reason, consults a professional to fully understand the options available.”
Red Flag Alert has been measuring and reporting corporate financial distress since 2004 and over that time has become an industry benchmark of underlying corporate health across all sectors and regions of the UK.
To learn more, visit https://www.begbies-traynorgroup.com/our-people/julie-palmer