The number of companies suffering financial distress is rising in Yorkshire, against the national trend.
But, the level of distress is falling and manufacturing is leading the way to economic recovery, according to the latest Red Flag Alert report by corporate recovery and business finance specialist Begbies Traynor.
The Red Flag Alert says the number of Yorkshire businesses in distress rose by 17 per cent in the first three months of the year, compared to the same period last year, which contrasts with a 17 per cent fall across the UK.
However, the number of companies in the region facing critical financial problems fell by 20 per cent, while the number of manufacturing companies displaying combined significant and critical distress dropped by 55 per cent.
Begbies Traynor uses a range of factual, legal and financial data to draw up its Red Flag Alert. Companies with “critical problems” are those with County Court Judgments against them totalling £5,000 or more or facing winding up petitions.Companies with “significant problems” are those facing either a court action or with poor, very poor, insolvent or out of date accounts.
Begbies Traynor’s Yorkshire regional managing partner Julian Pitts said: “Despite disappointing overall figures for Yorkshire, the latest year-on-year results indicate that there has been some progress away from another recession, led by the manufacturing sector.
“This encouraging trend has been aided by low interest rates and a competitive pound.”
David Wilson, regional senior partner for Begbies Traynor in Yorkshire, added: “Nationally, food and beverage manufacturing was the only sector to see falls in both year-on-year and quarter-on-quarter distress, suggesting that manufacturing is the engine that is starting to drive a recovery. With our strong and well established manufacturing base in Yorkshire, we are hopeful the region will benefit from this trend.”