Thousands of Bristol companies are in “significant financial distress”, new research has revealed. According to the latest figures from Begbies Traynor’s ‘Red Flag Alert’, which monitors the financial health of UK firms, more than 4,000 businesses in the city are in economic difficulty.
Problems are being caused by uncertainty around the economy, inflationary pressures and debt burdens, along with persisting weakness in consumer confidence, the report found.
The number of companies at risk of failure has increased by 1% compared to last quarter – and 16.5% over the year.
There are 677 construction businesses in “significant distress”, making it the most troubled sector in the city. There have also been increases in the number of retailers (48.7%) and bars and restaurants (42.9%) facing difficulties.
Paul Wood, partner at Begbies Traynor in Bristol, said: “There is no hiding from the fact that 2024 has been hard to navigate for companies, and the final quarter looks no different, as a high degree of uncertainty weighs on the UK economy.”
He added: “While there are tentative signs of a recovery, uncertainty continues to loom over Bristol businesses. In response, many business leaders are holding their breath as they await clarity over what the forthcoming Budget will bring.
“With wider geopolitical issues also having an impact, the only certainty is uncertainty, and we know this is bad for both business and investment alike. Combine this high level of uncertainty with the expectation of higher business costs post the Autumn Budget and it is clear that the economy is far from being out of the woods.”
Nationally, there were 632,756 businesses in significant distress in the third quarter of the year – an increase of 32.3% on the same period in 2023. Meanwhile, the number of businesses in ‘critical’ financial distress has decreased, with a quarterly fall of 23.2% to 31,201 and a year-on-year drop of 17.3%.