More than 1,700 businesses in Stoke-on-Trent found themselves in “significant” financial distress in the first quarter of 2022, according to a new report.
The latest Begbies Traynor Red Flag Alert data, which monitors the health of UK businesses, found that 1,704 businesses in the city said they were in financial difficulty between January and March.
The figure represents a 1% decrease in the number of struggling businesses over the previous three months, and also represents a 22% year-on-year drop from the same period in 2021.
The real estate and real estate and health and education sectors saw the strongest quarterly increases, with increases of 4% and 3% respectively between the last quarter of 2021 and the beginning of 2022.
BusinessLive is your home for business news from across the West Midlands including Birmingham, the Black Country, Solihull, Coventry and Staffordshire.
Click here to sign up for our daily email newsletter and also view the wide range of other newsletters we offer, including weekly industry specific updates.
We’ll also send “Breaking News” emails for any stories that need to be seen immediately.
For all the latest stories, opinions and polls, follow our LinkedIn BusinessLive West Midlands page here.
Nationally, 581,596 businesses reported being in serious trouble, which is stable compared to the previous quarter.
The figures also showed a marked increase in the number of businesses deemed to be in ‘critical’ distress, with a 19% year-on-year increase, driven by a 51% jump in the construction sector. and a 42% increase in the construction sector. bars and restaurants.
The sharp rise in county court judgments (CCJs) is also causing concern, as data revealed there were 11,673 judgments in March, a 179% increase on the monthly average of the previous two years. and the highest level in a single month in five years. .
Michaela Daly, director of Begbies Traynor in Staffordshire, said: “While the year-on-year data from distressed Stoke-on-Trent businesses may be encouraging, the distress critical and the figures for the CCJ highlights the problems piling up in the system.For the first time in more than a decade, inflation is the top business concern as companies battle rising costs.
“However, having invested so much money in protecting businesses over the past two years, the government will not want to see it wasted as businesses crumble, unable to repay their debts.
“Taking a hard line on the repayment of pandemic financing and other loans would likely drive many businesses to the brink, something no one wants to see as the economy struggles to recover.