MORE than 1,700 Bournemouth businesses were in “significant” financial distress in the third quarter of this year, research has found.
The number of struggling firms stood at 1,729 – a 16 per cent fall on the previous quarter following the removal of most Covid restrictions.
But Insolvency firm Begbies Traynor, which compiled the research, said there were still “considerable challenges” facing businesses this year, including supply and labour problems and the end of government Covid support.
Julie Palmer, partner at Begbies Traynor in Bournemouth, said: “The quarterly fall in significant financial distress is welcome news and provides some breathing space for hard-hit Bournemouth businesses. However, concerns remain that trading conditions will deteriorate for many companies, with rising county court judgement (CCJ) figures an early indicator that some suppliers are running out of patience with customers stretching payment terms.
“Despite the summer economic boom, systematic problems remain, and many businesses face a long-term struggle with repaying government-backed Covid loans.
“However, the combination of inflation, energy costs and labour availability may prove to be the tipping point for some businesses, particularly if they are unable to pass these costs on to their customers.
“These risks, combined with the withdrawal of government support measures and protection, could make for a tough rest of 2021 which could continue into 2022.”
In real estate and construction, the number of firms in serious distress in the Bournemouth area fell by 20 per cent between the second and third quarter of 2021, but were still 23 per cent of last year. In construction, it fell 24 per cent between quarters but was five per cent up on last year.
Nationally, Begbies’ Red Flag Alert research found 562,550 businesses in significant distress, a 14 per cent drop on the previous quarter but 15 per cent higher than before the pandemic.
There were 9,101 CCJs lodged against companies during the quarter, a 139 per cent increase.