The number of companies in the South West collapsing into insolvency has risen by nearly two thirds in a year, new research has revealed.
There were a total of 52 firms in the region that went bust in May - a rise of around 60% compared to the same time in 2021.
According to analysis of public records site The Gazette by the Bristol office of professional services firm Evelyn Partners ( formerly Tilney Smith & Williamson ), the region’s service and retail sectors were particularly badly affected.
The research, which was carried out exclusively for BusinessLive , found that businesses in the wholesale and retail trade in the South West are about a third more likely to fall victim to insolvency than in the rest of the UK.
Nigel Fox, a director in Evelyn Partners’ restructuring and recovery services team in Bristol, said the figures show the "increased strain" that businesses are under in the region.
Mr Fox said approximately a third of the firms that collapsed last month in the South West, Wales and rest of UK were in the service sector.
The shock figures follow a warning by the firm’s business recovery team that companies across the region are facing a “perfect storm” amid a rising tide of insolvencies. It says local companies are facing challenges from several directions including rising energy prices, high levels of debt and inflationary pressures.
Inflation rose to a 40-year high on Wednesday (June 22), with the rate of rising consumer goods prices up from 9% in April to 9.1% in May. The Bank of England has warned it could hit 11% by the autumn when energy bills rise.
“The increasing numbers of insolvency cases will not have been helped by the ending on March 31 of the remaining temporary measures put in place by the Government to support businesses," said Mr Fox.
Many small businesses across the South West are urging the Government to provide more support, with many fearing they could collapse if nothing is done to help.
Mr Fox said inflation and the rising price of energy for businesses - for which there is no cap - leaves firms "very exposed". He added: "Directors now need, increasingly more than in previous years, to regularly keep a close track of the health of their business because of a number of factors."
Earlier this year, South West chamber of commerce Business West called on the Government to expand the energy bills rebate scheme to help small firms, particularly energy intensive businesses.
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