Cause for ‘cautious optimism’ in Yorkshire despite gloomy forecast for UK economy

Amid growing fears of recession, and the escalating cost of living crisis, the latest data from independent business rescue and recovery specialist Begbies Traynor suggests some “encouraging” signs for Yorkshire businesses, with the region performing more strongly than other parts of the UK in the second quarter of 2022.

The latest Red Flag Alert data, published today by Begbies Traynor reveals that, in Yorkshire, the more advanced ‘critical’ distress, which refers to companies that have financial problems such as CCJs of more than £5,000 filed against them, rose by 15 per cent compared with the same period the previous year, while the UK as a whole saw an increase of 37 per cent.

It also revealed a 10 per cent fall in ‘critical’ distress in the region in Q2 2022, compared with the previous quarter. In contrast, there was a 3 per cent quarter-on-quarter rise across the UK.

Yorkshire reflected a similar picture to the UK as a whole In terms of ‘significant’ or early-stage distress, which refers to businesses that have had CCJs of less than £5,000 filed against them.

In the second three months of 2022, the region saw ‘significant’ distress fall by 14 per cent compared with Q2 2021, while the national average was a decrease of 11 per cent. Quarter on quarter there was no change in ‘significant’ distress levels either in Yorkshire or the UK as a whole.

More than 33,300 Yorkshire businesses experienced instances of early stage distress in the three months from April to June 2022, with over half a million (582,000) UK businesses demonstrating financial problems.

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.”