Thousands of Bristol companies found themselves in "significant financial distress" in the first quarter of the year, new data reveals.
Nearly 7,000 firms in the city were found to be struggling between January and March - a lower figure than at the same time in 2021 - latest research from corporate restructuring specialist Begbies Traynor shows.
The company's Red Flag Alert report, which monitors the financial health of British companies, found there was a 20% year-on-year fall on the same period in 2021. The number of businesses in financial difficulty also dropped 3% between Q4 of 2021 and Q1 of 2022.
However, when looking at different sectors, the industrial sector saw a 6% increase in firms in difficulty between the last quarter of 2021 and the first quarter of 2022, while the support services sectors saw a 1% rise.
Paul Wood, partner at Begbies Traynor in Bristol, said: “While the year-on-year data of companies in Bristol in significant distress may be encouraging, the critical distress and county court judgement (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."
Nationally, the latest Red Flag Alert research for Q1 2022 recorded 581,596 businesses in significant distress, which is flat on the previous quarter. However, the figures also showed a marked increase in the numbers of businesses deemed to be in ‘critical’ distress, with a 19% year-on-year increase driven by a 51% jump in the construction sector and a 42% 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 percent on the monthly average for the previous two years – and the highest level in a single month in five years.
