More than 1,700 Stoke-on-Trent businesses found themselves in 'significant' financial distress during the first quarter of 2022, a new report has found.
The latest Begbies Traynor Red Flag Alert data, which monitors the health of British companies, found that 1,704 businesses in the city reported being in financial distress between January and March.
The figure represents a one per cent decrease in the number of businesses struggling in the previous three months, and is also a 22 per cent year-on-year fall on the same period in 2021.
The estate and property and health and education sectors experienced the biggest quarterly increases, seeing four and three per cent rises respectively between the last quarter of 2021 and the beginning of 2022.
Nationally, 581,596 businesses reported being in significant distress, which is flat on the previous quarter.
The figures also showed a marked increase in the numbers of businesses deemed to be in 'critical' distress, with a 19 per cent year-on-year increase driven by a 51 per cent jump in the construction sector and a 42 per cent rise among bars and restaurants.
There are also concerns about a steep increase in County Court Judgements (CCJs) as data revealed there were 11,673 rulings in March – up 179 per cent on the monthly average for the previous two years, and the highest level in a single month in five years.
Michaela Daly, director at Begbies Traynor in Staffordshire, said: "While the year-on-year data of companies in Stoke-on-Trent in significant distress may be encouraging, the critical distress and CCJ numbers highlight troubles building up in the system. For the first time in more than decade, inflation is the prime concern for businesses as companies struggle under rising costs.
"However, having ploughed so much money into protecting businesses over the past two years, the Government won’t want to see it wasted as companies collapse, unable to repay their debts.
"Taking a hard line on repaying pandemic funding and other loans would likely drive many businesses over the edge, which no-one wants to see as the economy struggles to recover."
