More than 19,000 businesses in Wales found themselves in ‘significant’ financial distress during the final quarter of 2020 (October-December), according to the latest figures from leading independent insolvency firm, Begbies Traynor.
- Q4 2020 figures show 19,311 Welsh businesses are in significant distress – an increase of 25 percent since Q4 2019
- More than a quarter of these businesses – 5,317 – are in Cardiff and Swansea
- Sectors under stress in Wales include manufacturing, leisure & cultural and travel & tourism
- UK-wide, there are 630,000 businesses in significant distress, up 27 percent year-on-year, with all sectors monitored by the research reporting an increase in financial difficulty
Wales saw an 11 percent increase in the number of businesses struggling between Q3 and Q4 2020 to 19,311– up 25 percent on the same period in 2019.
Nationally, the latest Red Flag Alert research for Q4 2020 has recorded 630,000 businesses in ‘significant distress’, up 27 percent year-on-year. This represents the largest numerical quarterly increase (13 percent) in financially distressed companies since Q2 2017 – equivalent to 73,000 ailing businesses.
In Wales, businesses in some sectors faced greater financial difficulty than others, including manufacturing and travel & tourism, which both increased by 22 percent, and leisure & cultural, which increased by 18 percent between Q3 and Q4 2020.
Commenting on the figures, Huw Powell, managing partner at Begbies Traynor across South Wales, says:
“These figures give an insight into some of the financial stresses that have been building in Welsh businesses over the last year. Many businesses have been dealt another body blow by the latest lockdown. 2020 was a devastating year for thousands of businesses as they fell deeper into financial distress and Q1 2021 seems to be offering little hope of an upturn in the market. The Government’s extended furlough and financial support measures will provide some relief and certainly save a significant number of businesses from entering into insolvency in the short term, however this simply won’t be enough to save every business.
“Although the UK’s announcement of a trade deal with the EU and the roll-out of Covid-19 vaccines offer some light at the end of a very dark tunnel, it is likely to be some time before we see any sort of recovery.”
Wales businesses in distress – the numbers
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