As the cost of living crisis continues, new figures have revealed hundreds of Swindon businesses are feeling the financial pinch. 

According to Begbies Traynor's "Red Flag Alert", which monitors the financial health of British companies, 1,567 Swindon firms found themselves in 'significant' financial distress during the second quarter of 2022. 

While this amount is a 13 per cent year-on-year decrease in the same period in 2021, when many businesses were shut due to the Covid-19 lockdowns, the report says there is evidence that some of the region’s industries are continuing to struggle.

Industries under stress include professional services and retail with both experiencing the biggest quarterly increases, seeing six and seven per cent rises respectively between Q1 and Q2 2022.

The cost of living crisis has seen energy costs skyrocket, with some businesses having to pay double or more for their gas and electricity. Rising inflation, scarcity and increased costs for labour and materials and faltering consumer confidence have also contributed to further financial difficulty. 

Nationally, the latest Red Flag Alert research for Q2 2022 recorded 582,452 businesses in significant distress with companies continuing to be impacted by all of these factors. 

Evidence of this financial distress comes in the form of County Court Judgement (CCJ) data which is being used as an early warning sign of future insolvency, which revealed 46,235 rulings in the first six months of 2022, up 5% on the first quarter, as creditors tried to recover debts.

This compares with 59,042 CCJs during the entirety of 2021, with this year’s figure driven higher as the backlog in the courts clears and debts are pursued.

Commenting on the figures, Julie Palmer, partner at Begbies Traynor in Swindon, says:

“While the number of Swindon companies in distress is currently stable, a combination of economic issues have taken their toll to reduce both business and consumer confidence.

“Many businesses are fighting on in a climate of rising costs, but the environment is only going to get worse, not better, at least until next year.

"I fear that it will be a troublesome autumn as businesses which have struggled for so long are finally overwhelmed.

“That is why it is so important that any businesses facing financial difficulties, for whatever reason, should seek professional advice in order to fully understand the options available.”

Red Flag Alert has been measuring and reporting corporate financial distress since 2004, and over that time has become an industry benchmark of the underlying health of companies across every sector and region of the UK.

To find out more visit https://www.begbies-traynorgroup.com/our-people/julie-palmer