Business recovery specialist Begbies Traynor says things are improving for companies from Yorkshire, but the region’s economic health is still less robust than the rest of the UK.
According to the company’s recent ‘Red Flag Alert’ report, the number of Yorkshire companies experiencing critical financial problems has fallen by 21 per cent, compared with a national reduction of 22 per cent over the last year.
Begbies Traynor says Yorkshire’s year-on-year improvement masks a patchy recovery that is being led by the region’s business services sector.
Meanwhile, the number of companies facing problems has increased since the final quarter of 2012 at twice the rate recorded nationally.
Begbies Traynor says seasonal trends tend to produce a peak of distress in the months after Christmas, as creditors and directors take action ahead of having to file accounts for the new tax year. However, decreased consumer spending combined with particularly cold weather conditions have also hit consumer-facing sectors hard, causing greater business distress over the winter.
Begbies Traynor’s Sheffield-based partner, Adrian Graham, said: “Thanks to improving business confidence, increasing demand for advisory services and a revival of transactions, the support and professional services sectors are flourishing.
“The situation has certainly been helped by the fact that many of these businesses have reduced their cost bases significantly during the downturn such that any uptick in activity quickly improves their bottom line.”