Businesses in Yorkshire are displaying financial resilience in the face of continuing uncertainty over Brexit, according to the latest research from insolvency specialist Begbies Traynor.
The latest quarterly Red Flag Alert data released today by Begbies Traynor reveals that there has been no change in the number of businesses displaying ‘significant’ distress in Q1 2019 since the final quarter of 2018, with the total number of firms with ‘significant’ financial problems in the region standing at just over 29,000.
Year on year, distress among Yorkshire firms – and across the UK as a whole – had risen by two per cent. The ‘significant’ distress figures relate to businesses with minor CCJs filed against them, or those showing a marked deterioration in key financial ratios, and are often seen as early warning signs of more serious financial problems ahead.
Some industry sectors are faring worse than others however, with the region’s real estate and property services showing a 14 per cent increase in ‘significant’ distress year on year, affecting just under 2,800 businesses.
The leisure industry in Yorkshire also seems to have borne the brunt of consumers’ unwillingness to spend in a climate of economic uncertainty. Hotels and accommodation saw a growth in distress of 12 per cent year on year and seven per cent since Q4 2018, with more than 300 businesses affected, while sport and health clubs saw distress rise by 11 per cent year on year, affecting 630 businesses.
Sectors faring better in Yorkshire included printing and packaging, which saw an eight per cent decrease in distress year on year, and professional services with a five per cent year-on-year decrease.
Julian Pitts, regional managing partner for Begbies Traynor in Yorkshire, said: “Uncertainty continues to cast a long shadow over the economy with any potential agreement on a Brexit deal now kicked further down the road.
“In Yorkshire, as across the economy as a whole, firms are quite sensibly hitting the brakes and putting on hold capital investment such as in new plant machinery or technology.
“While it is encouraging to see the apparent resilience of our region’s firms, all businesses, and particularly SMEs, would do well to keep a tight rein on cash flow in this prolonged and unpredictable situation.”