Levels of ‘critical’ financial distress among UK businesses have dropped for the second consecutive quarter, according to the most recent Red Flag Alert issued by Begbies Traynor.
The number of businesses deemed to have ‘critical’ financial problems by the criteria of the report fell from 3,001 in Q2 to 2,951 in Q3 2013, a 2% drop, and following on from a 9% decrease between Q1 and Q2.
Businesses in consumer-facing industries seem to have experienced the most positive change in health, with ‘critical’ distress levels dropping significantly in the Bar & Restaurant (30%), Hotel (21%), Food Retail (16%) and General Retail (8%) sectors.
The reverse was evident among service industries, with critical distress levels rising in the Professional Services (34%), Financial Services (28%) and Support Services (9%) sectors.
The total number of critically distressed services businesses stands at 330, of which 83% are SMEs.
Though London experienced a slight improvement in Q2, its levels of critical distress rose 3% in Q3. Yorkshire & Humberside (5%), the South West (9%) and Scotland (23%) also saw rises.
On the other hand, the North East (20%) and Northern Ireland (18%) showed significant drops in critical distress, alongside the East of England (9%), thr Midlands (7%) and the North West (7%).
Ric Traynor, executive chairman of Begbies Traynor Group, said: “This quarter’s Red Flag statistics spell good tidings for the upcoming Christmas trading period, as a nationwide resurgence in consumer confidence has contributed to an overall reduction in ‘critical’ distress and positive growth across the regions.”