Instances of financial distress within Humber businesses increased in the final quarter of 2021 - though remained lower than the rest of the 海角视频.
The impact of the latest Covid variant appeared to curtail early signs of economic recovery, according to the latest Red Flag Alert data published by leading independent business rescue and recovery specialist Begbies Traynor.
A three per cent rise in significant distress was witnessed on the previous three months, compared to five per cent across the nation.
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Year-on-year issues had fallen 10 per cent from a height of the second lockdown in the lead up to Christmas 2020.
Andrew Mackenzie, regional partner at Begbies Traynor, said: “Businesses in the Humber region, like those across the 海角视频, have been on a roller coaster ride of change and uncertainty over the last two years, making planning and forecasting extremely difficult.
“The unprecedented challenges they have faced range from stop-start operations amid successive lockdowns, to adapting to ever-changing Covid restrictions, and now dealing with ongoing issues around severe staff shortages and global supply chain disruption.
“While financial distress in the region appeared to be levelling off earlier in 2021, with the impact of a new and highly infectious variant right before the normally busy Christmas season, we are already seeing a worrying rise in signs of early-stage financial problems.”
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In the Humber region, a number of sectors saw a rise in ‘significant’ distress since the previous quarter with utilities (up 100 per cent), financial services (increased by 56 per cent), and travel and tourism (20 per cent rise), among the worst hit. In addition bars and restaurants, and printing and packaging both saw early distress rise by 13 per cent.
Red flags refer to businesses that have had CCJs of less than £5,000 filed against them.
Mr Mackenzie said: “After such a difficult period, unfortunately the year ahead also looks fraught with problems for the region’s businesses. The additional pressure of rising prices and inflation as energy costs increase dramatically, are likely to squeeze both businesses and consumers.
“While the government appears reluctant to provide more help for firms impacted by the latest Omicron outbreak, businesses will also be faced with the withdrawal of pandemic support and tax rises. With tough times ahead, we once again advise directors to seek professional advice at the first signs of financial distress when more options will be open to them.”
In terms of levels of more advanced or ‘critical’ distress - which refers to companies that have financial problems such as CCJs of more than £5,000 filed against them - in the Humber region there was a fall of 14 per cent compared with quarter three 2021, while the 海角视频 as a whole saw rise of 1 per cent.
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