NORTHERN Ireland has bucked a UK-wide trend over the last quarter by reporting fewer new businesses facing financial distress.
The latest Red Flag Alert data from rescue and recovery specialist Begbies Traynor shows that despite a worsening UK-wide economic picture, Northern Ireland seen falling levels of both early and advanced financial distress in the third quarter of this year.
And even sectors like construction and property services had vastly fewer companies sending out distress signals than the previous quarter.
There was a 17.9% fall in levels of firms in the north experiencing advanced or critical distress since the previous quarter, and a drop of 31.6% compared with the same period the previous year. Just 538 businesses locally are now seen as facing major financial problems.
Looking at early or significant distress, there was a slight uplift of 1.9% quarter-on-quarter in the north, impacting 7,526 businesses over the period.
This type of distress (which refers to businesses having less working capital, contingent liabilities, retained profits and net worth) fell by 5.5% since the same period the previous year.
In contrast, across the UK, critical business distress increased by 25% on the previous quarter and by almost 2% year-on- year, to affect 37,722 firms.
Almost half a million companies (478,176) nationwide saw incidences of significant distress rise with an uplift of 8.7% quarter-on-quarter, and by 4.7% compared with Q3 2022.
Lawrence O’Hara, who leads Begbies Traynor in Northern Ireland, said: “It is very encouraging to see such resilience from businesses in Northern Ireland, particularly in the face of the challenges of rising operating costs and falling customer demand which have resulted in increased business distress across the UK as a whole.
“But with high interest rates continuing, prospects for the wider economy are far from rosy and we advise business owners to remain cautious.”
According to the report, construction, real estate and property services, support services, and general retailers saw the highest numbers of Northern Irish businesses in critical distress.
There were 123 construction firms in the north suffering from advanced financial problems, (down 27.2% on quarter two) while property firms accounted for 64 severely distressed businesses (down by 29.7%).
The sectors which saw the greatest quarter-on-quarter falls in critical distress in Northern Ireland were: utilities (down by 66.7%); manufacturing (down 61.5%); industrial transport and logistics (down 58.8%); and bars and restaurants (down 47.2%).
