Thousands of companies in Bristol are in “significant” economic distress, a new report has found.
More than 4,300 firms in the city are facing financial difficulty – an annual rise of 12.1% – according to Begbies Traynor’s latest ‘Red Flag Alert’, which monitors the financial health of UK companies.
Ongoing economic uncertainty and the impending impact of the tax, national insurance and national minimum wage increases announced in the Budget are all contributing to business stress.
There are 759 construction businesses in distress, making it the most troubled sector in Bristol. There have also been significant increases in the number of sport and health clubs, and real estate and property businesses, facing difficulties, with these industries seeing an annual increase of 47% and 26% respectively.
Paul Wood, partner at Begbies Traynor in Bristol, said: “Even at this very early stage, the outlook for the rest of 2025 is challenging, and many companies are clearly struggling to adapt to the compounding issues they are facing. Unfortunately, there is no easy fix, which will be very unsettling for businesses who are struggling to tread water already.”
Nationally, the latest Red Flag Alert research for Q4 2024 recorded 654,765 businesses in significant distress, which is 21.3% higher than the same period in 2023. There was also a surge in the number of UK firms entering ‘critical’ financial distress in the final quarter of 2024, rising by 50.2% to 46,853 companies.
“For many companies, which were already dealing with rising operational and borrowing costs, the increase in national insurance contributions and the national minimum wage announced at the last UK Budget, could result in further financial strain at a time when confidence is already low,” added Mr Wood.
“So, in the absence of a reduced tax burden and a strong economic recovery, unfortunately it is likely that the number of insolvencies will continue to rise in 2025 as firms struggle to cope with a perfect storm of rising costs, financial instability and fluctuating market conditions.”
Like this story? Why not sign up to get the latest South West business news straight to your inbox.