Thousands of Bristol businesses in ‘significant financial distress’

Thousands of Bristol businesses found themselves in “significant financial distress” in the first quarter of the year, new data reveals.

Nearly 7,000 businesses in the city were found to be in trouble between January and March – a lower figure than the same period in 2021 – shows the latest research from corporate restructuring specialist Begbies Traynor.

The company’s Red Flag Alert report, which monitors the financial health of UK businesses, showed a 20% year-on-year drop from the same period in 2021. The number of businesses in financial difficulty also fell by 3% between the fourth quarter of 2021 and Q1 of 2022.

However, looking at different sectors, the industrial sector saw a 6% increase in distressed businesses between the last quarter of 2021 and the first quarter of 2022, while the support services sectors saw a 1% rise. .

Paul Wood, partner at Begbies Traynor in Bristol, said: “While the year-on-year data from Bristol businesses in dire distress may be encouraging, the critical distress and county court judgment figures ( CCJ) highlight problems accumulating 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 push many businesses to the brink, something no one wants to see as the economy struggles to recover. »

Nationally, the latest Red Flag Alert search for the first quarter of 2022 recorded 581,596 businesses in significant distress, which is stable from the previous quarter. However, 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 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 – up 179% from the monthly average for the previous two years – and the highest level in a single month in five years.

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Sarah J. Greer