More than 3400 Shropshire companies classed as being in ‘significant’ economic distress

That's according to the latest figures from Begbies Traynor’s ‘Red Flag Alert’, which monitors the financial health of UK companies.

The data highlights the speed at which financial distress has accelerated over the last 12 months, with the economic challenges facing many companies putting considerable financial pressure on businesses across the county, with 3407 at risk of economic failure.

This represents a quarterly increase of 1.4 per cent, and an annual rise of 17.7 per cent.

The figures also highlighted particular sector hotspots, with the transport and logistics, plus health and education sectors seeing annual increases of 86.2 per cent and 82.4 per cent respectively in the number of companies in significant financial distress.

Nationally, the latest Red Flag Alert research for Q1 2024 recorded 554,554 businesses in significant distress, which is 30.8 per cent higher than the same period in 2023.

Additionally, the much more serious ‘critical’ financial distress has leapt 20.1 per cent compared to quarter one of 2023, with 40,174 UK businesses affected. Red Flag Alert’s historic data indicates that a large percentage of the businesses currently in ‘significant’ financial distress are likely to progress towards ‘critical’ financial distress and potential insolvency if the economic backdrop does not improve.

Mark Malone, partner at Begbies Traynor in Shropshire, said: “The macroeconomic conditions that made last year so difficult have continued to exert unrelenting pressure on corporate balance sheets. Despite some optimism as we entered the new year, 2024 has so far been characterised by a continuation of the same pressures that plagued companies in the UK throughout 2023.

“As a result, this latest data shows a marked increase in firms moving towards insolvency compared to the same period last year.

"Unfortunately, there’s no quick fix for our economy, and with inflation falling slower than expected, hope of a significant fall in interest rates in the near future seems to be fading.

“Sadly, the pressing issues facing many businesses today will simply push many over the edge and contribute to the current high level of UK corporate insolvencies.”