kris wigfield
Kris Wigfield, managing partner at Begbies Traynor Sheffield

Member Article

Sheffield industries hit by rising business distress

Some of Sheffield’s key industries saw financial distress increase both year on year and quarter on quarter, according to the latest quarterly Red Flag Alert data released today (30 January 2019) by leading business rescue and recovery specialist Begbies Traynor.

The new data reveals that for the three months to December last year, ‘significant’ business distress in Sheffield’s automotive industry rose by 10% year on year, and by 18% since Q3 2018, with the UK as a whole seeing a 4% drop in distress in the sector year on year and a rise of 3% on the previous quarter.

Also affected, according to the research, were printing and packaging, which saw a 13% increase both year on year and since Q3 of 2018; construction (3% year on year and 6% quarterly) and leisure and cultural activities (6% year on year and 5% quarterly).

‘Significant’ distress is often seen as an early warning sign of more severe financial problems to come and relates to businesses with minor CCJs filed against them, or those showing a marked deterioration in key financial ratios. Overall, ‘significant’ distress had fallen by 1% across the city since Q4 2017, but had risen by 4% since the third quarter of 2018. A total of 3,535 firms were facing financial problems in Q4 2018.

Commenting on the latest Red Flag Alert figures, Kris Wigfield, managing partner at Begbies Traynor Sheffield, said: “Despite a relatively optimistic overall picture, the mounting tensions and confusion over the future of the country after Brexit are taking a toll on several of Sheffield’s industry sectors.

“There are major concerns that this could be the calm before an inevitable economic storm, depending on how and when Britain departs from the European Union.

“As the effects of Brexit start to be felt, businesses, and SMEs in particular, need to be ready for some tough trading conditions ahead. Rigorous management structures and closely monitored cashflow will be essential for all organisations as we prepare to enter the uncharted waters of a post-Brexit economy.”

This was posted in Bdaily's Members' News section by Melanie Rice .

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