Levels of financial distress across businesses in Yorkshire and Humber hit record highs in recent months.
Research from restructuring firm Begbies Traynor points to a rapid increase in firms facing significant or early stage business distress in the final quarter of 2024. Across Yorkshire and Humber there were 48,900 business affected with levels rising 23% in Yorkshire and 22% in Humber, compared with the same quarter the year before. The numbers were also up 4.2% and 6% respectively on the third quarter of 2024.
In Yorkshire, distress touched every industry but particularly food and drink companies, which saw a surge despite a pre-Christmas sales boost. Bars and restaurants in Yorkshire suffered a 28.7% year-on-year hike in distress, though levels did fall 8.7% when compared to the previous quarter. And hotels and accommodation recorded a rise of 42.2% year-on-year. Meanwhile construction in Yorkshire continued to hold the highest number of distressed businesses at 7,458 – a 17.7% year-on-year rise.
The picture was similar in Humber where the food and drink sector bore higher levels of difficulties. Food and drug retail in the region experienced a 30% rise, while food and drink production distress levels were up 19% on the same period in 2023. The Humber construction industry saw 541 firms in distress – a 24% rise year-on-year.
Julian Pitts, regional managing partner for Begbies Traynor in Yorkshire, said: “Unfortunately, the fact that we are seeing unprecedented numbers of businesses across every sector of the economy struggling with the multiple challenges they face, and falling victim to financial distress, is extremely concerning. As we start a new year it is natural to look for some reasons for optimism, however the outlook for 2025 does look worryingly bleak as businesses face the prospect of escalating costs with rising operational costs and higher wages adding to an already difficult situation.
“This will only be compounded by the tax rises and increase in the national minimum wage levied on businesses in the Autumn Budget, placing yet more financial strain on businesses later this year, especially in labour-intensive sectors like retail and hospitality which generally operate on very narrow profit margins.”
Original artice – https://business-live.co.uk/all-about/yorkshire-humber
