Businesses in distress on the rise

The number of businesses in Shropshire in 'significant' financial distress is on the rise but dropping in the West Midlands county, according to new research.

New analysis for the second quarter of 2026 shows that Shropshire businesses in significant distress rose year on year by 2.6 per cent to 3,863 but those in the West Midlands fell slightly by 0.3 per cent to 37,783.

Staffordshire also welcomed a year-on-year drop, by 4.1 per cent to 3,851.

The data is contained within the latest Red Flag Alert report which is produced by financial and real estate services group BTG and has monitored the financial health of UK companies for over two decades.

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The picture across the wider region is more bleak as the number of Midlands businesses in 'critical' financial distress has risen by ten per cent in the second quarter, compared with the same period in 2025.

The region's tally of 6,301 companies was higher than the UK average which sat at nine per cent.

It also found 80,499 of Midlands businesses were in 'significant' financial distress in the second quarter of 2026, a 0.4 per cent year-on-year decrease.

The sectors with the most businesses in 'significant' financial distress were construction at 11,996, support services at 11,483 and real estate and property at 10,893.

This latest Red Flag Alert report sits against a backdrop of macroeconomic uncertainty and increased operational, employment, tax and supply chain costs, BTG says.

As businesses continue to acclimatise to these challenging market conditions, the data suggests that UK firms are struggling with their financial health as the second half of 2026 commences.

Nick West, a partner with BTG in Shropshire, said: "It is no surprise to see that Shropshire is one of the Midlands counties to see a continued annual rise in financial distress.

"Several years of increasing employment, energy, tax and supply chain costs have taken their toll across sectors and, with consumer and business confidence still shaky, many leaders will be hoping for some meaningful support to aim towards recovery.

"Leaders and business owners across Shropshire will be hoping the county won't be forgotten at the fringes of decisions and initiatives made by the new government and its focus on policies targeting regional growth.

"Though there is plenty that can be done without an agonising wait.

"The county and its businesses are resilient and, if leaders seek the right advice, seek to save costs and work with lenders early on, they will have the best chance at survival while the long-term solutions are identified."