More than 100 West Country companies collapsed last year as firms battled with tough trading conditions and an uncertain economic backdrop.
South West businesses accounted for 6% of administrations in 2024 – the eighth highest region in the UK – according to analysis of public records by law firm Shakespeare Martineau.
More than 1,700 UK businesses, 106 of which came from the South West, filed for administration over the period – a 28% and 5% increase compared to 2022 and 2023.
Retail, construction, hospitality, manufacturing and real estate were the worst-hit sectors for the second year in a row, collectively accounting for 55% of the 1,718 administrations.
Greater London led the way with 23% of the filings, followed by the North West (14%) and the South East (11%).
Insolvency and restructuring expert Andy Taylor has warned that ongoing tough trading conditions, rising geopolitical tensions and new tax burdens could tip even more businesses into financial distress.
Mr Taylor, who is a partner and head of restructuring at Shakespeare Martineau, said: “In 2025, businesses across the UK will face an increasingly challenging environment, with a perfect storm of factors threatening to push more companies toward financial difficulty.
“Prolonged periods of difficult trading, exacerbated by geopolitical tensions and the impact of new tax burdens introduced in the latest budget, will intensify the pressures many businesses are already grappling with.
“The increase in national insurance contributions, coupled with the lower threshold for payments, will stretch cash flows for companies that are already operating on razor-thin margins. Labour-intensive sectors, such as retail, hospitality and construction are particularly vulnerable as they often struggle to absorb rising overheads and additional costs.”
Mr Taylor said the pressures were “compounded by the uncertainty” in the global economy, which has already led to weakened consumer confidence and subdued spending.
“While many experts predict a potential easing of inflation in 2025, the overall landscape remains unpredictable,” he added. “It is crucial businesses do not bury their heads in the sand and ignore the signs of distress.”
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