‘Little room for optimism’ as Yorkshire economy shows marginal uptick

Business distress was marginally down in nearly every sector of Yorkshire’s economy in Q2 2018, according to research.

The quarterly Red Flag Alert data from business recovery firm Begbies Traynor found that, from April to June, ‘significant’ distress among Yorkshire-based companies fell by 1% in comparison to Q1, affecting 28,580 firms.

The result was in line with the national picture, with business distress across the UK dropping 1%.

In comparison to Q2 2017, however, ongoing ‘significant’ distress levels were up both in Yorkshire and the rest of the UK. Year on year, 7% more Yorkshire businesses found themselves in financial difficulty.

Construction was among Yorkshire’s hardest hit industries. More than 4,100 building firms in the region faced financial difficulties in Q2 2018. The figure represents a like-for-like fall of 2% but year-on-year rise of 3%.

Similarly, hotels and accommodation in ‘significant’ distress saw a 5% rise on Q1 2018 and 12% on Q2 2017.

Julian Pitts, Begbies Traynor’s regional managing partner for Yorkshire, said: “After a weak performance in the first quarter of 2018, a period marred by weak consumer confidence, growing political uncertainty and the fallout from last winter’s Beast from the East, it is encouraging to see at least some tentative signs of stability emerging across the regional and wider UK economy in recent months.

“However with Brexit-related turmoil and uncertainty, the squeeze on household incomes and public spending cuts still taking their toll on many sectors of the economy, there may be little room for optimism.”