Nearly 10,000 businesses in Devon are in financial distress, with construction and retail sectors hit hardest. Economic challenges are driving many towards potential bankruptcy.
Plymouth: Almost 10,000 businesses in Devon are struggling financially. A recent report shows a 26.1% increase in businesses facing serious issues compared to last year.
In the last quarter of 2024, 9,921 businesses in Devon were labeled as being in “significant distress.” The construction sector is the most affected, along with health clubs and food retailers.
Economic uncertainty and rising costs from tax and wage increases are adding to the stress. This has led to an 11.6% rise in distressed businesses just this quarter.
Specifically, 1,825 construction businesses are in trouble. Sport and health clubs, along with food and drug retailers, have seen increases of over 55% in distress levels.
In Plymouth alone, 1,178 businesses are in significant distress, marking an 18.39% rise from the previous quarter. This is a sharp increase from 942 businesses last July.
The property and construction sectors are particularly vulnerable. The number of distressed companies in real estate has jumped by nearly 40% compared to last year.
Nationally, over 654,000 businesses are in distress, a 21.3% increase from last year. The number of companies in “critical” distress has also surged by 50.2% in the last quarter.
Julie Palmer from Begbies Traynor warns that the outlook for 2025 is tough. Many businesses are struggling with rising costs and low confidence.
She notes that without tax relief and a strong economic recovery, insolvencies are likely to rise as companies face ongoing financial challenges.
The Red Flag Alert has tracked corporate financial distress since 2004. It uses data from various sources to assess the health of businesses across the UK.
Recent updates to the algorithm have improved the accuracy of these assessments, providing better insights into business health.
