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Pressures on UK plc "eased" in Q1 24 April 2013

Findings from the Begbies Traynor Red Flag Alert research for Q1 2013 show that the ‘critical’ financial problems facing UK plc’s have decreased by 34% compared to Q1 2012.

Across all sectors, ‘critical’ financial problems dropped from 5,000 cases in Q1 2012 to 3,283 in Q1 2013, indicating a possible positive turn in the UK economy, although the figures still show struggles within consumer-facing sectors.

Julie Palmer, partner at Begbies Traynor, said business confidence is slowly returning in the form of greater business spending on both services and investment, however, with both the support services and professional services sectors showing the highest positive improvement.

There was a 78% decrease in the services sector (760 to 169 cases between Q1 2012 and Q1 2013) and a 63% decrease in the professional services sector (176 to 66 cases between Q1 2012 and Q1 2013).

This is countered by an increase in cases within consumer facing markets, as unseasonal weather and changes in consumer habits have led to further struggles.

‘Critical’ financial problems within the general retailing sector increased 24% to 168 cases between Q1 2012 and Q1 2013), with cases in the leisure sector increasing 12% during the same period.

Palmer added: “Most of the consumer-facing industries are still losing ground, blaming an extended winter on lower footfall and constrained sales of spring season goods.”

However, the bars and restaurant sector improved most within consumer-facing sectors, with a decrease of ‘critical’ financial problems of 10% between Q4 2012 and Q1 2013, and a 66% decrease between Q1 2012 and Q1 2013.

A lack of funding to the UK SME market is still a concern, with the report finding that the number of companies that secured new funding was 15,804 in Q1 2013, a 14.5% decrease (18,493) from Q1 2012 and an 11% decrease (17,823) from Q4 2012.

Ric Traynor, chief executive of Begbies Traynor Group, said: “The 34% fall in critical distress levels across the UK is another welcome sign ahead of this week’s GDP announcement.

“The on-going lack of funding to the SME sector remains the greatest obstacle to a stronger and sustained recovery.”



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