Fewer Yorkshire and Humber businesses experienced significant or early-stage distress in the second quarter of this year, prompting cautious optimism about resilience across the regions.
New research from business recovery group Begbies Traynor shows the number of businesses in Yorkshire experiencing significant distress - defined as having county court judgements (CCJs) of less than £5,000 filed against them - fell by 14% compared to the same period last year. In Humber, significant distress fell by 12% year-on-year. However, firms experiencing critical distress - defined as those facing financial problems such as CCJs of more than £5,000 - rose by 15% in Yorkshire, compared to the second quarter of 2021.
In the three months from April to June more than 33,300 Yorkshire businesses experienced instances of early stage distress, while across Humber, 1,524 businesses fell into that category in the same period. Nationally, the number of businesses facing early stage distress averaged a decrease of 11% compared to last year, with no change in distress levels since the first quarter of the year.
Read more: Skipton Building Society grows pre-tax profits amid record mortgage applications
Julian Pitts, regional managing partner for Begbies Traynor in Yorkshire, said: “It is certainly encouraging that Yorkshire is bucking the national trend in terms of more serious ‘critical’ distress, with rates apparently decreasing since the start of the year. Nevertheless, the ongoing economic uncertainty we are all facing over the impact of Brexit, continued Covid lockdowns in China and supply chain problems, as well as soaring energy costs, certainly does not bode well for businesses.
“As ever, we are advising firms to get the right strategies in place now in order to increase their resilience to economic turbulence, and of course seek professional help sooner rather than later if they begin to experience financial difficulties.” Andrew Mackenzie, partner at Begbies Traynor in the Humber region, also said the data provided "encouraging signs" for the Humber region.
Across Yorkshire, the utilities sector was among the hardest hit by significant distress with a 16% rise in firms affected since the first quarter of the year. There were also rises among food and drug retailers at 7%; food and drink production at 3% and travel and tourism at 3%. Across Humber the travel and tourism industry saw a 14% rise while financial services saw a 13% rise and food and drug retailers an 8% rise.
Printing and packaging firms saw a fall in distress levels across both Yorkshire and Humber. In Yorkshire, leisure and cultural businesses saw a 5% fall; health and education, industrial transportation and logistics, sport and health clubs all 3% falls; financial services and support services both 2%. In Humber, hotels and accommodation saw a significant fall of 25% while industrial, transportation and logistics experienced an 18% fall.
READ NEXT:
