Fewer companies in critical distress

Latest figures from the Red Flag survey, issued by financial services company Begbies Traynor, show that the number of companies in critical distress fell from 16 to six between the second and third quarters of the year.

And the proportion facing "significant" problems has also fallen, from 1,587 to 1,535.

At the same point a year ago, nine companies were at risk of imminent collapse, the figures show.

But 1,471 had significant problems, demonstrating that not everything is rosy in Shropshire's business landscape.

John Kelly, Begbies Traynor's regional managing partner, said the significant distress levels showed how businesses need continuing central banking support if they are to stay off the critical list.

"Many of these firms are being kept alive by cheap credit," he said. "I have no doubt that a large number would find themselves in critical distress in the event of an interest rate rise.

"But for the moment they will continue to exist via the lifeline of bank finance without making any retained profit and with little available capital for growth plans."

Bars and restaurants have felt an increase in significant difficulty over the last year, with a 77 per cent rise in the number affected to 83, down from 84 in the second quarter.

The number of travel and tourism businesses with money troubles rose by 150 per cent, from eight to 20, and the logistics industry also experienced a rise in cash worries, up by 71 per cent to 29.

But the number of financial services businesses in distress almost halved, from 30 to 17 over the last year.

On the critical list, there are five fewer construction companies teetering on the brink, with just one now in serious trouble – although the numbers do not take account of businesses which fell over the edge and into liquidation, rather than righting their listing finances.

Mr Kelly added that rapid progress in unified authorities and devolved decision-making would also help accelerate economic growth.

"Elsewhere, the concept of joined-up regional decision making has really taken hold because local leaders have embraced devolution and partnership working," he added.

"These opportunities are also available to us in the Midlands and we need to capitalise on them as a matter of urgency, if we're to build a more prosperous region and reduce the number firms facing a future of life on the precipice."