Insolvency risk rises across all East Midlands sectors
Insolvency risk levels have increased across all major sectors in the East Midlands, according to the latest figures from R3.
The restructuring and insolvency trade body also report that firms now face the greatest level of risk than at any other point in 2017.
Nearly three in ten businesses in the region demonstrate an above average risk of insolvency, which equates to around 60,000 firms.
The figure of 28.9% for September was up 2.8% from a month previously, and up more than 4% from the turn of the year.
Compiled using data from Bureau Van Dijk’s Fame database, all of the major sectors – including construction, agriculture, hotels and restaurants, retail, manufacturing and professional services – saw risk levels rise.
However, the transport and haulage sector is struggling most, as 38.5% of these firms in the East Midlands are at increased risk of insolvency.
The agricultural sector meanwhile saw risk jump 5.8% month on month, yet despite this the sector was found to be more financial stable than in other UK regions.
Just under one in five firms were found to be facing above average risk of insolvency, which is significantly ahead of the national average.
R3 Midlands chairman Chris Radford added that the final quarter of 2017 could offer testing times for businesses, as he said many long-term fixed-price contracts are unwinding or have already unwound.
He also pointed to resilient consumer spending habits, although he warned that it falls against a backdrop of increased borrowing – the situation may therefore not be as clear as it seems.
Any business facing the threat of insolvency or financial difficulties should seek corporate advisory services to see if there are solutions to help realise the potential of their company.
A range of insolvency methods can be implemented at an early stage, provided that an insolvency practitioners is given enough time to act.
Businesses are encouraged to seek assistance at the first signs of trouble and to be aware of the options that could be available to them.
By Phil Smith