Batten down the hatches for economic storm'.
YORKSHIRE businesses are being hit by escalating levels of financial distress across every sector of the regional economy, according to insolvency industry research.
Construction, automotive, manufacturing and retail sectors all reported double-figure increases in the number of firms facing "critical" or "significant" distress.
The quarterly Red Flag Alert data from business rescue and recovery specialist Begbies Traynor showed distress levels in both categories rose in April, May and June of this year both in Yorkshire and across the UK.
In Yorkshire "critical" distress - which refers to businesses which have had winding up petitions or county court judgements (CCJs) of more than PS5,000 taken out against them - was up by 26% compared with the same three months last year, affecting 165 businesses.
"Significant" distress, which relates to businesses with minor CCJs filed against them, or those showing a marked deterioration in key financial ratios, rose by 9% in the past three months and by 24% since the same period in 2016 to affect 20,169 businesses in the region.
Across the UK, "critical" distress rose by 21% year on year and "significant" distress was up by 25% compared with the second quarter of 2016.
Construction industry was particularly badly hit with companies in the sector accounting for more than a quarter of all the "critically" distressed businesses in Yorkshire. Construction also saw a 25% climb in "significant" distress since last year's figures, with the industry making up 14% of all "significant" distress in the region, affecting 2,782 building companies.
Other Yorkshire industries which saw a jump in distress levels include manufacturing, which saw "significant" distress rise by 16% year-on-year to affect 1,004 businesses; food and drug retail, which was up by 14%; general retail up by 20%; and bars and restaurants up by 20% to affect 981 businesses.
Julian Pitts, regional managing partner for Begbies Traynor in Yorkshire, said: "The escalating levels of 'significant' distress, which are affecting every industry across our region, are of major concern and spell a discouraging forecast for both the Yorkshire and the UK economy.
"The worrying fact is that these sorts of less severe financial problems are generally seen as a warning of more serious problems to come and this is extremely unwelcome news.
"The recently reported drop in manufacturing output, a construction industry slowdown and widening of Britain's trade deficit by the Office of National Statistics have all helped to knock the value of the pound against the dollar and the euro still further and suggest an alarming reversal of the economic resilience that was being hailed by some after last summer's referendum.
"Yorkshire businesses should certainly ensure they have battened down all the hatches and have robust management systems and processes in place as there is certainly no clear sense of when, or how, this impending economic storm is likely to pass."
|Printer friendly Cite/link Email Feedback|
|Publication:||Huddersfield Daily Examiner (Huddersfield, England)|
|Date:||Aug 3, 2017|
|Previous Article:||Specialist using futuristic system to show off past.|
|Next Article:||Experts get jittery over interest rates; Simon Kaye, of Investec Wealth & Investment, ponders the future path of interest rates.|