'More than 38,000 Yorkshire businesses are in financial distress'

More than 38,000 Yorkshire businesses are now in financial distress, according to a new study.
Julian PittsJulian Pitts
Julian Pitts

The latest Red Flag Alert research found that across Yorkshire, business distress has surged 29 per cent since the end of 2019, with more than 38,000 of the region’s firms now in financial trouble, a year-on-year increase of almost 9,000 businesses.

The research, from business rescue and recovery specialist, Begbies Traynor, also found that, in Yorkshire, every one of the 22 sectors monitored by Red Flag Alert displayed a double-digit increase in ‘significant’ distress year-on-year, ranging from an 18% to a 45% rise.

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In Yorkshire some of the worst hit sectors were financial services (with distress up 45% year on year and 28% on Q3 2020), travel and tourism (up 40% year on year and 21% quarter on quarter) and property (up 39% year on year and 18% on the previous quarter).

Julian Pitts, Begbies Traynor’s regional managing partner for Yorkshire, said: “The pandemic meant that 2020 was a devastating year for thousands of businesses as they fell further into financial distress and Q1 2021 seems to be offering little hope of an upturn.”

“The Government’s extended furlough and financial support measures will provide some relief and should save a significant number of businesses from entering into insolvency in the short term.”

He added: “Unfortunately though, for many struggling companies, Government financial help will provide little more than a stay of execution as debt levels become unmanageable and structural changes across many sectors take their toll.”

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