Thousands of businesses in Bristol are in significant financial distress as they continue to battle with challenges caused by the pandemic, new data has revealed.
Some 6,476 companies in the city found themselves in difficulty between July and September of this year, according to the latest research from insolvency firm Begbies Traynor.
There was a four per cent increase in the number of businesses struggling between Q2 and Q3 of 2020 - up eight per cent on the same period in 2019.
Businesses in some sectors faced greater financial difficulty than others, including real estate and property, which saw a nine per cent increase in firms in trouble.
The retail industry in Bristol also saw a four per cent rise in businesses in financial distress between the second and third quarter.
Some sectors, such as media and financial services, showed relative stability however, according to the Red Flag Alert data.
Paul Wood, partner at Begbies Traynor in Bristol, said: “Bristol businesses continue to face multiple challenges – from unpredictable consumer demand to restrictions on the way they offer their services, as well as managing the direct health impact of the pandemic on their workforce.
“This is undoubtedly taking its toll, as reflected in these regional figures.
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“It is noteworthy that the number of businesses in significant distress has grown substantially in the last three months, even with court capacity significantly reduced due to the pandemic.
“As such, there could be a significant number of insolvencies when the courts do get back to anywhere near normal capacity and attempt to clear the backlog of pending cases.”
Mr Wood added: “Unfortunately, a combination of a grim economic data, and very poor trading conditions, particularly in the most vulnerable sectors such as hospitality will take its toll and this is expected to feed through to Q1 2021 as restrictions continue.”
Nationally, there were 557,000 businesses in significant financial distress over the period - up six per cent from quarter two of 2020.
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The rise comes despite a backlog of court action preventing many county court judgements (CCJs) and winding-up petitions being issued, according to the Begbies Traynor report.
Data shows there were 26,244 CCJs lodged against companies during March, April and May in 2019, with only 10,045 lodged during the same period in 2020 - a fall of 62 per cent.
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The situation is even more acute with regard to more serious winding up petitions, Begbies Traynor said.
During March, April and May last year, 1,019 were lodged compared to 101 during the same period in 2020, a fall of 90 per cent.