481,000 Companies Now in Significant Financial Distress

The amount of business in significant financial distress is now 481,000 according to Red Flag Alert. This is up by 15,000 from the previous quarter.

This rise follows a winter of uncertainty around the economy and Brexit in particular. The sector which has been hit the hardest is real estate and property, following a slowdown in house sales, there was a rise of 7% from Q3 2018 to Q4 2018 which equates to 3134 companies.

Other sectors which were hit hardest include companies in support services up 4%, professional services up 4% and construction also up 4%.

A sector which wasn’t hid as hard as expected, despite all the headlines, was the retail sector which saw only a 2% increase, however, Q4 is the run up to Christmas which is usually a strong trading period for retailers.

Rick Smith – Managing Director said:

“These figures are not too surprising. The uncertainty around Brexit is causing lots of problems in the business world and I think this is only the start. I’m sure that there is worse to come yet even with the changes the chancellor has put in place for small businesses. However, businesses will need to adapt in order to survive, they need to make sure they have a good mix of on-line and off-line activities to help them grow.”