Weak consumer spending and ongoing economic and political uncertainty have left more than 1,400 businesses across Stoke-on-Trent in ‘significant’ financial distress, according to a new report.
Insolvency practitioner Begbies Traynor has released its Red Flag Alert report - which measures the underlying health of companies across every sector and region of the UK - for the second quarter of 2019.
The new data outlines how 1,463 firms across the Potteries are struggling with rising debt – particularly those in the real estate and property sectors.
At the same time, 484,000 UK businesses are in significant financial distress – with the average company debt increasing by 122 per cent in the past three years to £66,000.
Diane Dunion, partner at Begbies Traynor in Stoke-on-Trent, said: “This latest Red Flag Alert shows the desperate need for political and economic clarity, as businesses continue to be hit hard, with real estate and property companies most affected by the weakest consumer spending since records began in the mid-1990s.”
She added: “We have to remember that while an average debt of £66,000 won’t seem much to a multi-million-pound company, this can be a significant amount for SMEs, which are the engine room of both Stoke-on-Trent and the wider UK economy.”
More positively, the figures also revealed that some sectors in Stoke-on-Trent are showing tentative signs of stability during the same time period – with health and education and manufacturing recording a decrease of 10 percent and eight per cent of businesses in distress respectively.
Diane added: “While there have been some positive signs in this Red Flag Alert - with a plateauing in the number of distressed manufacturing firms in Stoke-on-Trent - there is always a storm brewing on the horizon in the current business climate."
